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Tuesday, January 19, 2021

Suriname offshore breakeven expected to go down with more discoveries

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The projected breakeven price for development of oil fields offshore Suriname is expected to reduce in coming years as more discoveries are made, and production gets underway.

So far, three discoveries have been made at Block 58, estimated to contain combined resources of 1.4 billion barrels of oil equivalent with a breakeven price of $45/bl.

“The Guyana-Suriname basin is one of the [world’s] most attractive basins with a breakeven below $40/bl for the Guyanese fields and around $45/bl for the fields within Surinamese waters,” says Palzor Shenga, senior upstream analyst at consultancy group Rystad Energy. “However, we believe the breakeven price for the latter will go down as more and more resource gets discovered and we get closer to development scenarios.”

Low breakevens and high-quality oil have played a key role in the resilience of the Stabroek Block offshore Guyana where US oil major ExxonMobil has found approximately 9 billion barrels of oil equivalent resources, spread across 18 discoveries. The company began producing oil at the Liza Phase 1 Development in December 2019.

An analysis completed by RS Energy of the 50 top global development projects and major shale plays shows that Liza Phase 1 is expected to generate the lowest breakeven oil price of the top offshore developments and shale plays in the world.

“The implication of falling breakeven prices is that the upstream industry, over the last two years, has become more competitive than ever and is able to supply more volumes at a lower price,” said Espen Erlingsen, Head of Upstream Research at Rystad Energy.

So far, Liza Phase 1, 2 and the Payara Development are the projects which have been sanctioned in Guyana.  These projects have a Brent breakeven oil price of between $25 to $35 per barrel.

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