Despite challenges both at the global and domestic levels, investment in Guyana’s oil and gas sector has remained robust in recent years. In fact, Americas Market Intelligence Co-Director, Arthur Deakin has pointed out that between 2015 and 2019, oil and gas companies invested US$8.1 billion in exploration and development activities in Guyana’s offshore sector.
SBM Offshore, ExxonMobil discussing extending lease durations for Guyana FPSOs
Deakin said that this massive scale of investment should come as no surprise since one industry giant, ExxonMobil, which is also the lead operator in Guyana’s Stabroek block, continues to reiterate that Guyana, along with Brazil, is a key asset in its portfolio. Indeed, Exxon and its partner, Hess Corporation, have always been in high praise of Guyana’s US$35 breakeven cost and high quality, sweet crude which have become more appealing as crude prices collapsed and the International Maritime Organization implemented stricter fuel emission policies.
Due to increased investor pressure, pandemic losses, and stricter environmental regulations, Deakin was keen to note that oil majors have become more selective about spending money and more serious about protecting the environment. But in order to build good-will across the world, including among Guyana’s people and politicians, Deakin posited that oil companies should double down on their carbon capture projects and invest heavily in climate-friendly ventures. The analyst holds the view that this will allow them to step into their new roles amidst this accelerating energy transition.
As it stands, Deakin said that both European and American oil companies are at a crossroads that will determine their future success. In this regard, he said that one path points to an increase in hydrocarbon investments while sticking to their core assets. The other path he said, and the recommended one at that, points to an optimal balance between strategic oil assets and renewable energies focused on cutting emissions.
Although the routes will lead to largely different outcomes, Deakin firmly believes that the common denominator will be a portfolio of high-quality assets such as Guyana and Suriname. He stressed however that the winning route is also likely to have a substantial mix of solar and wind projects that will help drive this new energy transition forward.
