S&P Global Commodity Insights’ oil pricing and news expert Patrick Harrington sees Guyana and Brazil’s crude going toe-to-toe when Guyana’s production hikes.
“…as Guyana’s production ramps up, Guyana and Brazilian crude will be in real head-to-head competition,” Harrington shared in a recent podcast discussing Guyana’s crude market.
Hitting a production rate of 1.3 million barrels a day is in Guyana’s sights by 2027 as Stabroek Block operator ExxonMobil gears up for the sixth development – Whiptail. The requisite regulatory approvals are being awaited.
When Guyana hits that level, it would come second only to Brazil as the largest producer in South America.
In the wider Latin America context, while Brazil and Guyana are located in South America, they continue to excel in the global oil industry while other veteran producers in the region are somewhat struggling to keep up.
“We’re seeing a kind of a shakeup or a reorientation of what we thought of as the crude landscape of Latin America, even though Guyana does not really think of itself as Latin. Physically it is there in Latin America. So, the traditional big producers in Latin America, Venezuela, Mexico, Colombia, and Ecuador – are all having some problems. Venezuelan exports have fallen off the map, and Columbia, Mexico, Ecuador, are in decline. But Argentina, Guyana, and Brazil are set. So, we have a shakeup of the traditional Latin American mix,” Harrington explained.
Guyana’s proven reserves are already reviving Latin America’s production, according to The Economist.
The International Energy Agency says global production will increase by 5.8 million barrels through 2028. About a quarter of the incremental supply will come from Latin America with Guyana alone adding over 1.2 million of these barrels.
Guyana’s production started back in 2019 from the Stabroek Block – the country’s largest acreage over 11 billion barrels have been discovered. Exxon has been moving at a steady pace since.
It has hit multiple discoveries – more than 30 – with an unprecedented success rate of 80%. It brought online two massive projects – Liza 1 and Liza 2, now producing close to 400,000 barrels per day. The third project – Payara is due for start-up by year-end; the fourth – Yellowtail is in development. The fifth – Uaru was approved this year.
