Guyana's GDP Skyrocket by Over 40% in a Single Year Thanks to Oil Boom

• Guyana's oil production has surged since 2019, making it the fifth-largest oil producer in South America.
• Guyana's GDP has tripled in the past four years, driven by its oil wealth.
• Guyana is forecast to become South America's second-largest oil producer by 2030.

Impoverished South American country Guyana, once long ignored by the world, has emerged as a major global oil producer after supermajor Exxon made a swath of world-class discoveries in its territorial waters. Since production began in 2019, the national government in the capital, Georgetown, has reaped a massive economic windfall, with gross domestic product (GDP) surging to record highs. In as little as four years since the height of the COVID-19 pandemic, Guyana’s economy has more than tripled in size, experiencing enviable double-digit annual GDP growth, with the economy expanding by a stunning 43.5% in 2020 alone when most countries saw GDP contract. As oil output expands, Guyana will enjoy further sizzling economic growth, with the gigantic petroleum boom sparking a fiscal bonanza.

After the first oil from Exxon’s Liza-1 floating production storage and offloading (FPSO) vessel in December 2019, Guyana’s oil production has surged, with output expanding nearly ninefold between January 2020 and May 2024. According to Guyana’s Ministry of Natural Resources data, the tiny South American country was lifting 654,270 barrels of crude oil daily, ranking it as the continent’s fifth-largest petroleum producer. Production is touted to continue climbing at a solid clip, well into the mid-2030s, as further offshore facilities are developed, with the lion's share occurring in the prolific Stabroek Block, where Exxon has found at least 11 billion barrels of oil resources. 

After bringing three projects online in the Stabroek Block since 2019, Exxon announced in April 2024 that it is proceeding with its sixth project, the $12.7 billion Whiptail facility. This operation is slated for first oil during 2027 and will add 250,000 barrels per day to existing production. The Texas-based supermajor just announced approval of its seventh project for offshore Guyana, the seven-billion-dollar 180,000 barrel per day Hammerhead development, which will come online during 2029. Guyana’s petroleum production is forecast to exceed 1.5 million barrels per day by 2030, potentially making the former British colony South America’s second-biggest oil producer, behind Brazil, and the 14th largest globally. 

This rapidly expanding oil output will deliver an ongoing economic bonanza for a country that was among South America’s poorest before Exxon’s throng of world-class oil discoveries. According to S&P Global, Guyana will rank among the world's 15 largest petroleum-producing countries by the mid-2030s, with oil exports forecast to be responsible for 90% of GDP by the end of this decade. For those reasons, the International Monetary Fund (IMF) expects Guyana’s economy to grow by a stunning 33.9% alone during 2024 and then 18.7% in 2025. Those impressive numbers come hot on the heels of a remarkable 33% expansion for 2023, where GDP, in current prices, hit $17 billion or $21,470 per head of population. This saw Guyana become the world’s second-fastest-growing country, with the performance only eclipsed by the Beijing-controlled Macao SAR, where GDP grew 80.5%. 

After that astonishing GDP growth, despite being one of South America’s smallest economies, Guyana finished 2023 as the continent’s second wealthiest country, behind Uruguay, on a per capita basis. The astounding 33.9% GDP growth slated for 2024 ranks Guyana as the world’s fastest-growing economy. If it is achieved, the country’s GDP will hit an all-time high of $21 billion, which is equivalent to $26,590 per head of population. This will see Guyana’s GDP per capita surpass Uruguay's, making the tiny country of less than one million the wealthiest in South America when using that metric. As oil production expands, so will GDP, with the IMF forecasting that Guyana’s economy will be worth $31 billion by the end of this decade. The considerable profitability of Exxon’s operations in the Stabroek Block offshore Guyana will incentivize further investment.

By Matthew Smith for Oilprice.com

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