Guyana’s oil wealth grows

Guyana’s expected riches from enormous oil revenues will be even bigger than anticipated after more discoveries. The amount of oil discovered in the Guyana region in the past seven years means it could soon be producing more oil than Brazil. Guyana’s population is around 780,000, Brazil’s is 213 million.

ExxonMobil and its partners Hess and CNOOC have made an astounding number of high-quality oil discoveries in offshore Guyana. Two months ago Exxon announced that it made three more discoveries in the 6.6-million acre Stabroek Block, where it is the operator holding a 45 percent interest with 30 percent owned by Hess and the remaining 25 percent held by CNOOC. The discoveries were made at the Barreleye-1, Patwa-1 and Lukanani-1 well.

That brings the number of oil discoveries so far this year in offshore Guyana to five and a total of at least 31 discoveries in the Stabroek Block since 2015. Exxon estimates that those latest discoveries give it around 11 billion barrels of recoverable oil resources in the Stabroek block. The current price of a barrel of oil is $120. This is the world’s largest oil discovery in two decades.

The swath of oil discoveries in offshore Guyana are not limited to the Exxon-led consortium’s operations in the Stabroek Block, other energy companies are reporting similar quality finds. In January In January Canadian driller Frontera Energy, Colombia’s third largest oil producer, along with partner CGX Energy, of which Frontera is the controlling shareholder, announced the discovery of oil in the Corentyne Block.

The Guyana government is expecting its second lift of one million barrels of oil from the Liza Unity vessel and with global oil prices still high, the country could get about US$120 million (or GY $25 billion) when the oil is sold.

Natural Resources Minister Vickram Bharrat said recently that the second set of oil the government is entitled to from the Liza Unity oil ship was expected later this month.

While industry analysts predicted in 2020 that Guyana will be pumping 1.2 million barrels of crude oil daily by 2027, there is every indication, based on the latest developments, that output will be far higher by then. Government officials believe crude oil production could reach 1.5 million barrels per day, or more, from as many as 12 Floating Production Storage and Offloading facilities in five years. If that is achieved Guyana will emerge as the third largest oil-producing nation in Latin America and the Caribbean with only Brazil and Mexico pumping more crude oil, resulting in a tremendous economic boom. The former British colony will emerge as a leading global oil exporter with its petroleum output far exceeding domestic demand, while government coffers will swell with annual income expected to over $10 billion.