A recent International Energy Agency (IEA) report revealed that global oil demand is set to decelerate as the energy transition gains momentum. However, Guyana’s oil and gas sector will continue its rapid expansion. Last year, President Irfaan Ali emphasized the urgency of ramping up oil production, stating, “Time is not on Guyana’s side.”
Vice President Bharrat Jagdeo, in his weekly press conference on June 13 2024, stressed the importance of securing investments early due to the predicted decline in oil demand.
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Jagdeo said, “If fossil fuel will have an overproduction and a step fall-off as the IEA is predicting, then beyond that date, you’re not going to get investments in the sector because there is no demand for it. Nobody will invest because their assets will be stranded, and they will incur significant financial losses. So, what you have to do is secure your investments early.”
Jagdeo highlighted that Guyana has already secured six floating production storage and offloading (FPSO) units, which will boost the country’s oil production to 1.3 million barrels per day, representing an investment of over US$50 billion. He noted, “Very, very few countries have been able to secure that level of investment in fossil fuel.”
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The IEA reported that non-OPEC+ producers are leading the global production capacity expansion. These producers are expected to account for three-quarters of the increase in capacity by 2030. The U.S. is set to contribute 2.1 million barrels per day, with Argentina, Brazil, Canada, and Guyana collectively adding another 2.7 million barrels per day.
The IEA also mentioned that oil prices could drop to US$60 per barrel next year due to anticipated overproduction and large inventories.
ExxonMobil currently has three developments online in Guyana’s Stabroek Block: Liza Phase 1, Liza Phase 2 and Payara. Together, the three produce over 600,000 barrels of oil per day. And this will only climb. Exxon has the Yellowtail development for start-up next year and two other projects – Uaru and Whiptail, under construction.
