Guyana is listed among just a handful of countries in the world where oil production is expected to grow this year despite the decline in prices and challenging market conditions being fueled by the COVID-19 pandemic.
Non-OPEC liquids production growth in 2020 (including processing gains) has been revised down by a considerable 3.26 mb/d from the previous assessment and is now forecast to decline by 1.50 mb/d in 2020. The expected global economic recession due to COVID-19 and resulting demand shock are also forecast to cause considerable supply disruptions. Benchmark oil prices have plunged below the cost of production in most fields across the globe, prompting companies to respond by cutting capital expenditure, OPEC said in its Monthly Oil Market report for April.
“The expected decline in upstream investment will make this year’s CAPEX volumes, estimated at about $450 billion, the lowest in 13 years. Before the COVID-19 pandemic, E&P CAPEX was expected to remain flat y-o-y. The 2020 oil supply growth forecast for the US has been revised down by 1.05 mb/d, to now show a decline of 0.15 mb/d y-o-y,” the report said.
Additionally, the originally expected oil supply growth for the 10 non-OPEC participants in the Declaration of Cooperation, has been adjusted based on the recent agreement.
“Historically, price changes have impacted US oil output with an approximate six-month time lag, but this time, the impact is expected to be felt much faster. In 2020, growth in oil supply is so far only forecast for Norway, Brazil, Guyana and Australia,” the report stated.
In Guyana, US oil major ExxonMobil is the operator at the 6.6 million acres Stabroek Block where it has found more than 8 billion barrels of oil equivalent resources. The company began producing oil at the 120,000 bpd Liza Phase 1 Development last December and is looking to ramp up production to more than 750,000 bpd by 2025, from multiple developments on the block.