If observers require a compelling global case to understand why Guyana’s accelerated march to energy independence is justified, then they only ought to look at the crisis gripping Europe, says Iman Hill, Chief Executive Officer (CEO) of the International Association of Oil and Gas Producers (IOGP).
The petroleum engineer, who has operated in the sector for more than 30 years, told attendees during the opening session of the Guyana Basins Summit on Tuesday that the ramifications of external dependence on energy has an entire continent scrambling to find alternative energy sources ahead of winter.
Hill was referencing the economic fallout since the Russia-Ukraine war which started in February. International media reports note that since July, Russia choked off significant supplies of cheap natural gas to the continent which depended on same for years to run factories, generate electricity and heat homes.
Hill said, “Europe demonstrates to the world why it is important to develop your own resources. Energy security has shot up the priority list of all governments.”
If one couples this race for energy supply with the fact that global oil and gas acreage awards are at a near all-time low, Hill said one also gets a more vivid picture of why the accelerated development of Guyana’s resources is so critical to the region.
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She noted that Norway’s leading consultancy group, Rystad Energy, expects 44 lease rounds to be held by the end of the year, which is 14 awards lower than 2021 and the lowest level since 2000.
Russian acreage, she said, traditionally the largest, has dropped 90% from one year ago. Interestingly, Asia has bucked the trend, quadrupling its awarded acreage so far this year from the same period last year, while awards in South America have surged by 140%. Leading the pack in awarding the newest blocks is Brazil, with 59 rounds.
Taking the foregoing into account, the head of the oil producers body said Guyana’s upcoming bid round is a most welcomed announcement for the industry.
Guyana’s Cabinet recently noted that it is finalising the new fiscal terms and conditions for the auction which will be conducted by year-end.