London-based IHS Markit says what Guyana has achieved in just under seven years since the first major oil discovery at the Stabroek Block is ‘quite remarkable’ and commended the South American country for pushing the offshore exploration and production activities alongside strong environmental commitments.
“What Guyana has achieved is quite remarkable, measured in the speed of development and the simultaneous careful attention to environmental and social context,” said Dr. Daniel Yergin, IHS Markit Vice President, speaking at the International Energy Conference this week.
Yergin said the “environmental commitments are notable” as embodied in Guyana’s expanded Low-Carbon Development Strategy support for carbon tax and flaring deduction.
“This whole development in Guyana has been characterised by decisions that have enabled the project to go ahead and start returning revenues to Guyana earlier than major projects like this in other major countries,” Yergin stated.
The South American country began producing oil in 2019, less than five years after ExxonMobil hit the jackpot at the Stabroek Block, delivering 800 million to 1.5 billion barrels of oil equivalent resources at the Liza-1 discovery. Production started just last week at Liza Phase 2, while a third project at Payara has been approved, and Yellowtail, the largest development so far, is awaiting the greenlight from authorities. Exxon is also already moving towards its fifth project at Uaru.
“It was important to bring in revenues quickly, not to take ten years but to take three years,” Yergin said. “Guyana recognised the importance of strong institutions that’s working with the international community to support that endeavor, best practices among companies and best practices for the institutions that Guyana is developing.”
The analyst pointed out that the challenge is managing the massive inflow of revenues to the government from the growing offshore developments so that overheating of the economy and other distortions are avoided.
“These are challenges that will be of ongoing importance. But let me underline, issues will come up, questions will come up, times will change, controversy will emerge, but resolving them within the sound framework that the government has established and in partnership with the companies – that will be of benefit to all,” he said.
