Guyana’s government should consider hedging its oil production against falling prices, as the country’s growing oil revenues are expected to decline due to recent price slumps, former Minister of Finance Winston Jordan said in an interview with Stabroek News on Monday.
Oil prices have dropped since early April, following threats by U.S. President Donald Trump to impose tariffs on global markets, including hefty tariffs on China. Additionally, OPEC+ is increasing production by three times the volume initially expected for May and June.
As oil prices fall, major oil-producing countries, including Guyana, which now produces over 650,000 barrels per day (bpd) from Exxon’s offshore projects, are facing shrinking revenues from oil exports.
Since Guyana began producing oil in 2019, its economy has boomed, showing double-digit GDP growth in recent years. However, Jordan warns that the government must prepare for periods of lower oil prices to protect the country’s financial stability.
“The more Floating Production Storage and Offloading (FPSO) vessels ExxonMobil brings on, the higher the costs,” Jordan explained. “If you are producing more oil at a lower price, it will take longer to recover Exxon’s operational costs.”
He added that Guyana’s hopes for a better share of profits from oil could be dashed, likening it to a fleeting illusion, as Bob Marley once said.
Guyana’s oil production has already surpassed 660,000 bpd from the Exxon-operated Stabroek block. The country’s output is expected to exceed 1.7 million bpd by 2030, with gross production reaching 1.3 million bpd, according to Exxon. This places Guyana as the third-largest oil producer per capita in the world.
The rapid increase in oil production has helped fuel Guyana’s economic growth, which surged by 43.6% last year. This marked the fifth consecutive year of double-digit GDP growth since the country became an oil producer.
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