The announcement this week by U.S. oil major ExxonMobil that it has discovered more oil off the coast of Guyana further enhances the outlook analysts have had for the new oil producing country. Additional volumes being discovered at the prolific Stabroek Block cements the expectation that more FPSOs will be commissioned to produce the hydrocarbons found across multiple reservoirs.
Exxon said Wednesday the Whiptail-1 well encountered 246 feet (75 meters) of net pay in high-quality oil-bearing sandstone reservoirs while Whiptail-2 encountered 167 feet (51 meters) of net pay.
Luiz Hayum, Senior Analyst on Wood Mackenzie’s Latin America Upstream Research team, said Thursday that Whiptail-1 encountered the fifth-longest net oil pay of all the discoveries made at Stabroek Block to date. He noted also that Whiptail-2 points to the long oil column and areal extent of the reservoir. Exxon said it was still conducting drill operations at the well.
In an interview with OilNOW, Hayum was keen to note the significance of the Whiptail discoveries. He said, “Depending on the results from deepening the wells, Whiptail could prove to be a large discovery and possibly anchor a new FPSO installation or support the delineation plans for FPSO number 5.”
Exxon reaffirmed this week that at least six projects are expected to come online by 2027 and sees potential for up to 10 projects to develop its current recoverable resource base which exceeds 9 billion barrels of oil equivalent.
Hayum said the latest discoveries support this plan and will lead to Guyana exceeding the 1 million barrels of oil per day milestone.
“The discovery supports the operator’s plan to install up to 10 FPSOs in the field and eventually, production would exceed 1 million b/d,” he said. “If the plans materialize, government revenue will grow into multi-billion-dollar figures and should translate into benefits for the population.”
WoodMac has said in previous analysis that oil production per capita in Guyana will eclipse even that of the leading Middle East producers, Kuwait, UAE and Saudi Arabia.
The ramp up in offshore developments, WoodMac pointed out, will result in large sums being spent on production equipment outside of Guyana while considerable investment will take place in-country, related to onshore and offshore infrastructure to support the growing oil industry.
Revenue from royalty and tax started to flow in 2020 and will climb progressively to an annual peak of US$13 billion by 2029 based on WoodMac’s calculations. To date, the country has received over US$340 million in revenue from royalty and oil exports.
