Factors affecting the global oil market have been plenty but prices have remained fairly balanced, said Carlos Pascual, Senior Vice President for Global Energy and International Affairs at S&P Global Commodity Insights. That is because of “strong oil balances” in the world today. Pascual presented this point during the Guyana Energy Conference and Supply Chain Expo.
Pascual said the growth in supply from countries outside of the Organization of Petroleum Exporting Countries (OPEC) is increasing faster than demand. And that supply is emerging from the Americas but more specifically, the newcomer on the block – Guyana.
“Guyana is one of the four incremental producers in the world. And the point I want to leave you with is that having incremental capacity is contributing to an international system that adds to the stability of security and supply, at a time when the world is in crisis,” he explained.
Guyana’s oil helping to stabilize global energy markets – Exxon Upstream President
The S&P official pointed out that crisis will always remain but it is the factor of supply and demand that offers a counterbalance to that geopolitical risk.
“We are always going to face uncertainties and the ability to have access to that stability of supply in an environment that is also in a net zero, in a net negative carbon economy is quite unique. And that is something that Guyana is offering us today,” he added.
Guyana has only been a producer for under five years. The backbone of Guyana’s impact lies in the output from the Stabroek Block projects, which currently exceeds 600,000 barrels per day (b/d), surpassing initial projections. Huzefa Ali, ExxonMobil Guyana Limited’s (EMGL) new Production Manager, announced that the total production capacity across all three facilities now stands at 645,000 b/d. This capacity exceeds the initial target for the projects by a collective 85,000 b/d.
And the desire for its low-cost, low-carbon barrels only continues to increase. S&P Global’s Richard Swann has identified Guyana’s oil as a potential replacement for Russia’s Ural oil in the global market. The opportunity came about after Russia invaded Ukraine and faced sanctions from Western nations.
The quality of Guyanese oil is notably competitive. Liza Crude, categorized as medium sweet, has a sulfur level of 0.58% and an API gravity of 32. Unity Gold boasts a 34.5 API and a 0.41% sulfur content, while Payara, although heavier, is valued at a premium, with a 28 API and 0.58% sulfur content. In comparison, Russian Ural oil, formerly a mainstay for Europe, has a gravity typically about 31.78 API and a higher sulfur content of about 1.35%, according to Energy Intelligence.
The stabilization of oil prices signals an adapting market, incorporating new sources like Guyanese oil, which offers a growing alternative to Russian Ural. With ExxonMobil increasing production at the Stabroek Block, Guyana’s crude exports to Europe have surged, reaching 215,000 barrels per day in the first half of 2023, accounting for 63% of the country’s total exports.
