Sluggish world oil price affects Guyana’s projected oil earnings

Guyana’s oil revenues barely increased during the first half of 2025 due to a reduction in international oil prices, but the sector is projected to grow this year with the start of production by the floating production storage and offloading (FPSO) vessel at Yellowtail in the Stabroek Block, according to the mid-year economic report tabled in the National Assembly on Monday.

“Crude oil prices are anticipated to come in at 15.7 percent below the 2024 level, to average US$68 per barrel in 2025, lower than the US$71.9 per barrel projected at the time of preparing Budget 2025,” states the report that was tabled in the House by finance minister Dr Ashni Singh.

The actual Brent crude futures on Monday rose 12 cents to US$64.89 per barrel. Reuters also reported on Monday, that Morgan Stanley raised its Brent crude forecast for the first half of 2026 to $60 a barrel from $57.50, citing the decision by OPEC+ to pause quota hikes in the first quarter of next year and recently on Russian oil assets.

In addition to the overall projected 15.6 percent growth in the oil sector due to earlier-than-anticipated production at Yellowtail, the report states that that output would see Guyana projected to increase the number of lifts of profit oil from 31 to 33. As a result of that, Guyana’s petroleum deposits for the year are now projected to total $2,512.4 million, only marginally higher than the US$2,503 million projected at the time of preparing the 2025 National Budget, “on account of lower crude oil prices”.

In terms of the Natural Resources Fund (NRF), Guyana’s version of a sovereign wealth fund, the mid-year report states that in keeping with the NRF Act 2021, US$2,463.9 million is expected to be withdrawn from the fund this year. As a result, the NRF closing balance is estimated to stand at US$3,248.8 million at the end of 2025.

The mid-year report states that the oil and gas industry is estimated to have expanded by 5.5 percent in the first half of 2025. Production in the first six months of the year totalled 115.7 million barrels, compared with 113.5 million barrels over the same period last year.

With the three producing projects in the Stabroek Block, the report states that the daily production averaged nearly 640,000 barrels per day (bpd) in the first half of this year, compared with approximately 624,000 bpd in the first half of last year. The finance ministry’s report further states that the moderation in the production rate on the Destiny FPSO from about 157,000 bpd last year, to 142,000 bpd this year, was offset by increased production rates on the Unity and Prosperity FPSOs to 246,000 bpd and 252,000 bpd, respectively.