An analyst at energy and commodities information company S&P Global Platts anticipates that ExxonMobil’s 3rd proposed development at the Stabroek Block offshore Guyana will be delayed by a year.
The Payara development, which is targeting 180,000 to 220,000 barrels of oil per day, was initially expected to be sanctioned last year, with a startup in 2023 but has been facing government approval challenges for several months as an electoral crisis in the South American country deepens.
Tristan Reilly, an analyst with S&P Global Platts Analytics, projects Payara will be delayed by a year. According to a report published on Wednesday, Reilly noted that Hammerhead, another Stabroek discovery which was meant to be the next project in line after Payara, is also likely to experience a setback.
Norway-based energy research and business intelligence company, Rystad Energy, has said a 24-month delay for the Payara development could see Guyana losing as much as 75 million barrels of oil, amounting to an estimated $1.6 billion loss.
A more than 4-month delay in the conclusion of elections and the announcement this week of US visa restrictions for Guyanese government and other officials believed to be complicit in efforts to derail the democratic process are making investors increasingly concerned.
“Should the US see no improvement in the situation in Guyana, the sanctions might be ramped up to include economic sanctions such as sanctions on shipping, on Guyanese individuals doing business with American companies, and on the payments of goods and services for the oil industry,” Kevin Ramnarine, former Trinidad and Tobago Energy Minister, told OilNOW on Wednesday.
The Payara project will utilize onshore infrastructure which include shorebases, warehouses, storage and pipe yards, fabrication facilities, fuel supply facilities, and waste management facilities in Guyana. Continued project delays means a range of businesses along the supply chain will be adversely affected putting a number of jobs at risk.