Oil production in Guyana is expected to rapidly increase in the coming years as more developments are sanctioned, and floating production storage and offloading units (FPSO) come online. Norway-based Rystad Energy expects this output to hit peak in the mid-2030s at around 1.4 million barrels of oil per day (b/d).
At current levels, this would make Guyana the 3rd largest producer in the Latin America/Caribbean Region, behind just Brazil (3.6 million b/d) and Mexico (1.9 million b/d).
Luiz Hayman, Senior Analyst for the Latin American region at Wood Mackenzie has said Guyana can even catapult to the number 2 position, after Brazil.
“Depending on how Mexico and Venezuela perform the next five years, before the end of the decade Guyana could become the second largest producer in Latin America,” he said.
Oil production in the region is currently dominated by Brazil, Mexico, and Venezuela which are collectively responsible for about 75% of the region’s total output. However, since ExxonMobil began unlocking the deepwater potential offshore Guyana, the country is now on the radar as becoming a major producer in the region.
“The huge successes in Guyana, in the Stabroek Block has propelled it to becoming an oil producer in less than five years after the first discovery was made,” said Sonya Boodoo, Vice President of Upstream Research at Rystad Energy. “All of these big discoveries are likely to generate quite significant wealth for the stakeholders if they are developed.”
Rystad Energy has already said Guyana is on course to receive the highest estimated total income from its multi-billion-barrel oil and gas resources when compared to both Suriname and Trinidad and Tobago (T&T), under various oil price scenarios.
Of the 18 discoveries made since 2015, three projects have so far been sanctioned – Liza 1, 2 and Payara, and operator ExxonMobil expects this to ramp up to around five by 2026, generating more than 750,000 b/d.
“Current production capacity at around 120,000 barrels per day can grow to about 1.4 million barrels of oil equivalent per day by the mid-2030s,” Boodoo said.
The revenue outlook for Guyana, Suriname and Trinidad and Tobago remains favourable, she said, but is dependent on the timely approval of projects.
“All three governments are in a position to receive substantial revenue from the upstream sector, however, delays–whether political in nature or as a result of the company’s capital allocation constraints, will have a strong negative impact on the sums generated and all stakeholders involved will benefit from timely approvals,” Boodoo pointed out.
Almost all of the discoveries made offshore Guyana so far have been at Stabroek – 18 out of 21 – with significant prospects still remaining in the massive 6.6 million acres block. This, together with the ramp up in exploration activities outside of Stabroek, means potential remains high for more discoveries and field developments offshore the South American country in coming years.