Between December 2019 when oil production started in Guyana, and the end of 2021, the country had received around US$608 million from a total of 9 oil lifts averaging 1 million barrels each, and royalty payments. But what Guyana took two years to acquire in revenue could now be secured in a matter of months if oil prices continue to skyrocket as a result of fallout from Russia’s invasion of Ukraine.
Norway-based Rystad Energy said on Tuesday global oil prices could rise to $200 a barrel if Europe and the United States ban imports of Russian oil. On the same day, U.S. President Joe Biden imposed an immediate ban on Russian oil and other energy imports in retaliation for the invasion of Ukraine.
Reports on Wednesday also indicate that the UK is to phase out Russian oil imports by the end of 2022.
OilNOW understands that about 8% of US oil and refined product imports come from Russia, while Russia makes up about 6% of the UK’s oil imports.
Rystad Energy analysts said the $200 per barrel estimate was based on an assumption that Western sanctions could remove about 4 million barrels per day (bpd) of Russian crude.
Russia, the world’s second-biggest oil exporter, ships about 7 million bpd of crude and oil products combined.
Americas Market Intelligence (AMI) said this week it expects Guyana to benefit the most from rising oil price this year, compared to its neighbours in Latin America.
The firm adjudged that the overall impact of higher energy prices will be negative for Argentina and Dominican Republic, and very negative for Chile and Peru. For five other countries – Mexico, Suriname, Ecuador, Venezuela and Panama – an assessment of the risks and benefits sees them getting a neutral rating. For Colombia and Costa Rica, they will see an overall positive impact, while Guyana and Brazil will see overall very positive impacts, according to the AMI assessment.
Guyana’s total production will rise to around 340,000 barrels of oil per day by the end of this year and will increase by more than three times this amount by 2027, when ExxonMobil, operator at the Stabroek Block, says it will have the capacity for output of around 1.2 million barrels per day.