Guyana falls within the Golden Triangle of mega oil reserves along with countries such as Brazil, Venezuela and Nigeria, and producers in the US Gulf of Mexico.
Deepwater drilling used to be prohibitively expensive, but high oil prices in 2007 and 2008 contributed to a renewed interest in offshore reserves which has seen oil companies drilling further out to sea and deeper than ever before to reach the last remaining pockets of oil.
Guyana, nestled between oil producers Brazil, Venezuela and Suriname, was an unknown up until five years ago when US oil major ExxonMobil made its first world class discovery at the Stabroek Block. Since that time, the country has begun producing oil and Exxon along with co-venturers Hess and CNOOC have found more than 8 billion barrels of oil equivalent resources.
“The 6.6 million acres Stabroek block is extremely wide and could also support more discoveries within, as it is more than a thousand times larger than the typical US Gulf of Mexico block,” Adrian Lara, Senior Oil and Gas Analyst at GlobalData has said.
The Motley Fool points out that fields in the Gulf of Mexico, Brazil, and West Africa regions have a similar geology because they’re the remnants of when the Americas and Africa were a single continent hundreds of millions of years ago.
“All of these regions have the potential to hold several billion barrels of oil and could be a major source of new oil for the world,” Tyler Crowe, writing in The Motley Fool, said.
Up until Exxon struck black gold in Guyana, most of the deepwater oil being discovered in the Golden Triangle came from the Gulf of Mexico, Brazil and West Africa.
“Since 2015, Brazil and Guyana have been the focal point of activity in the region. As the site of some of the most exciting discoveries over the last few years, the Guyana basin is firmly established as one of the world’s exploration hotspots. And by 2025, Brazil will produce a third of global deepwater volumes,” Luiz Hayum, Wood Mackenzie’s Upstream Research Senior Analyst for Latin America said.
Meanwhile, Guyana is set to become just the 11th nation in history to reach the one million barrel a day milestone.
“Guyana’s oil fields are prodigious…The phased development will lift output to over 1.1 million b/d by 2028 and Guyana will become just the 11th nation in oil’s history to reach the million b/d milestone,” said Simon Flowers, WoodMac’s Chairman and Chief Analyst.
WoodMac says the Liza Complex is one of the largest and best deepwater projects in the world with a winning combination of attractive fiscal terms, resource scale and reservoir quality making it comparable with the best the pre-salt has to offer in Brazil.