Offshore exploration and production activities in South America have long been dominated by Brazil with its vast offshore pre-salt developments. State oil company Petroleo Brasileiro SA (Petrobras) alone accounted for nearly 88% of the continent’s deepwater OPEX in the 2013-2020 period. Now, in just five years, Guyana and Suriname have emerged as major players to watch with a rapidly increasing volume of discovered hydrocarbon resources. In fact, the outlook for the region’s deepwater province, even under the dark cloud of the global pandemic, remains positive due to projected output from Brazil and the new oil and gas hotspots.
“Offshore activity in Latin America is expected to recover from 2021 with more than 3 million barrels per day of peak production estimated to be sanctioned in Brazil and Guyana alone by 2025,” Rystad Energy said. In Suriname, oil production is expected to get underway by mid-decade, further adding to the barrels projected for South America.
“Among major offshore producing regions, Brazil and Guyana combined will account for more than one-third of the offshore investments and the capacity to be sanctioned over the next five years,” Rystad Energy said. “They will also account for more than 40% of the reserves to be sanctioned.”
Already, approximately 9 billion barrels of oil equivalent (boe) have been found at Guyana’s Stabroek Block by ExxonMobil while Apache has discovered an estimated 1.4 billion boe in Suriname’s Block 58. The discoveries at Stabroek number 18 while in Block 58 the count stands at 3.
“We forecast first oil occurs in 2026, with production from each successive phase commencing in one-year increments thereafter,” US multinational investment bank and financial services company Morgan Stanley said of Suriname’s Block 58.
Meanwhile in Guyana, oil production is already underway at the Liza Phase 1 Development and two other projects (Liza Phase 2 and Payara) have been sanctioned to date, for start-up in 2022 and 2024. ExxonMobil expects production to surpass the 750,000 bpd mark by 2026 when five projects are online.
“In Guyana, all discoveries in the Stabroek Block and major Brazilian projects that are expected to be sanctioned by 2025 including Buzios, Mero and Bacalhau, have a breakeven of less than $45,” Rystad Energy said, noting that these low breakeven prices play a major role in the resilience of the Guyana-Suriname and Brazil basins.