No backtracking of spending by ExxonMobil in Guyana – API’s Chief Economist

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The continuation of exploration and production activities offshore Guyana means that the South American country has not seen a backtracking of spending by ExxonMobil as has been the case with other oil majors in various parts of the world.

This is according to Chief Economist at the American Petroleum Institute (API), Dr Dean Foreman, who delivered a presentation on ‘Global Energy and Economic Update – An API Perspective’ to the executive and membership of the Georgetown Chamber of Commerce and Industry (GCCI) via Zoom on Tuesday.

“With oil and gas specifically and what it means for Guyana, I think you have seen that the resource stacks up well, the investment has continued…. At this point I think it’s good news and a good indication that Guyana has not seen backtracking so far,” he said, warning however that this can change. Dr Foreman also credited the quality of Guyana’s crude for the country’s continued attractiveness as a petroleum destination and its ability to weather the storm.

“The key for Guyana is that it has a very attractive crude oil, creating relationships with refineries in North America, Europe and Asia Pacific,” Dr Foreman said.

Infrastructure critical for gas utilisation

Responding to a query about the use of the associated natural gas discovered in the giant Liza Field within the Stabroek Block offshore Guyana, Dr Foreman said that the utilization of the gas must be in sync with the needs of the country. “As you develop oil and you have gas you reinject the vast majority of that… [Further] developing natural gas requires a commitment to the [necessary] infrastructure over time,” he said.

ExxonMobil and the Government of Guyana have been engaged in discussions with a view to examining the possibilities for piping the gas from the Liza field to shore to be used for power generation and other applications. The project would involve running a 120-mile-long pipeline from the Liza field to shore, which has been determined to be ‘technically feasible’.

During his presentation Dr. Foreman spoke of the dynamics of supply and demand within the oil and gas industry and how Guyana could be affected. He also gave a historical perspective on global recessions and how economies recovered.

Guyana commenced oil production in the Stabroek Block in December 2019. While the COVID-19 pandemic had resulted in delays in some drilling operations due to travel restrictions and airport closures, the work of ExxonMobil and its co-venturers offshore Guyana has remained largely unaffected.

Dr. Foreman, who specializes in global business and energy, has more than 20 years of industry experience in corporate strategic planning, market analysis and forecasting, finance and risk management.

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