According to the IMF, Guyana’s economy will grow by 86% next year, which is 14 times the growth rate expected in China. Bloomberg writes about the secret of the economic miracle.
In 2020, Guyana, one of the smallest countries in South America with a population of only 780,000, could grow by 86%. By 2024, the country’s GDP, which now stands at about $4 billion, would increase to $15 billion. It’s all about the oil reserves discovered on Guyana’s shelf in 2015.
Exxon Mobil, the first to discover oil reserves in Guyana, where no production had been done before, is about to start it this year. By 2025, the company hopes to produce about 750 thousand barrels per day in the country – this is about 20% of the current production of Exxon Mobil and approximately corresponds to all current production of Venezuela.
- Since 2015, when Exxon announced its first discovery, 16 deposits have already been discovered in the country, and large companies, including Total and Repsol, continue to conduct exploration on its shelf.
- In five years, the oil industry will account for up to 40% of the country’s GDP, the IMF said. By 2025, revenues from oil and gas projects could exceed $ 5 billion per year.
- Guyana’s government created a sovereign fund last year. The country’s authorities expect that from the initial $ 300 million by 2022, the fund will double due to royalties and revenues from profit-sharing agreements with oil companies. It is planned that it will be spent on projects to develop the country’s economy and to protect it from fluctuations in oil prices.
The country may not be able to cope with the “tsunami” of petrodollars and the sharp transformation into a petrostate, experts interviewed by Bloomberg this summer warned. Its oil laws were written back in the 1980s, the budget of the local Department of Energy does not exceed $2 million, and in the five years since the first opening of Exxon Mobil, the country has not appeared either adequate regulation in the field of exploration and production, no clear plans for the expenditure of funds of the sovereign fund. The main risk is considered to be the future rampant corruption.