Guyana: The New Saudi Arabia (part 1)
A lot of money to be made when a country goes from one of the poorest to one the richest
Forgotten Guyana
There are places in the world that are for all practical purposes forgotten if not forsaken. Guyana is one of these.
The country is populated by only 800,000, making it even smaller than where I live in Estonia. But for a surface similar to Romania or England. It should not be mistaken with French Guyana next door, a French-controlled territory. Its 3 neighbors are Venezuela, Brazil, and Suriname.
This led to a massive outflow of the population, with 39% of the Guyanese citizens living abroad and half of the segment with tertiary education.
The economy used to be slave plantation of cash crops, and then mostly exporting gold and aluminum ore.
This is really as underdeveloped as it gets from an economic perspective. And would make for poor prospects from an investment perspective.
Except that the country is getting rich VERY quickly.
(if you want to follow news about Guyana, I recommend Stabroek News)
Offshore Black Gold
Until recently, it was assumed that the valuable natural resources in Guyana were in the hostile inland jungle. That was until oil exploration efforts led by Exxon, together with Hess and CNOOC found a mega oil deposit off the Guyanese coast.
(you can learn more about Guyana's geography in the “national land use plan” from which I got the map below).
The Liza oilfield was discovered in 2015 and was one of the largest discoveries of the decade. It is part of the Stabroek block, so far the central spot of oil discovery in Guyana. The block reserves have been regularly updated upward, and are judged to contain (for now) 11 BILLION barrels.
This is a staggering number, that needs to be put in perspective.
Brazil’s entire reserves are estimated at 12.7 billion barrels.
When you put it on a per capita basis, Guyana has 267x more oil per inhabitant than Brazil.
Despite Brazil being the 8th largest oil producer in the world, ahead of Kuwait or Iran.
This means that Guyana could by the end of the 2020s rank among the top 10 oil producers in the world. In a period likely to be marked by energy crises and wars.
People might be scared of investing in a poor country, poorly managed, with equally poor infrastructure. But it does not matter when such a staggering amount of money will flow into the country.
We know it because we have a great template in the shape of Saudi Arabia, which I covered in the last report. No matter how backward culturally, how unproductive its population, and how poor its education system is, the country, and its inhabitants became fabulously rich.
The difference is that investing in Guyana now is like betting on the Saudi economy in the 1950s.
Now, the Guyanese economy and its stock market are still extremely undeveloped sector. It is really off the radar and hard to invest in.
So this report will guide you on what can be bought and what I think makes the most sense to capture the meteoritic rise of Guyana as a petrostate. Just look at the GDP per capita forecast and tell me if there is ANYWHERE in the world like that:
You can also read more about the case for Guyana’s stock market in this article.
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