Wednesday, November 30, 2022

Two years later, Guyana oil discoveries soar, prosperity on the horizon

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Exactly two years ago today, Guyana produced its first barrel of oil, marking a historic moment that will forever change the face of this South American country. Now, the nation of just over 750,000 people is poised to become the biggest per capita oil producer in the world.

First oil came approximately five years after the first discovery was announced in May 2015 and three months ahead of schedule, making it one of the fastest production ramp-ups in the industry’s history.

Commenting at the time, Darren Woods, chairman and chief executive officer of Exxon Mobil Corporation said the historic milestone to start oil production safely and on schedule demonstrates the company’s commitment to quality and leadership in project execution.

“We are proud of our work with the Guyanese people and government to realize our shared long-term vision of responsible resource development that maximises benefits for all,” Woods said.

The first phase of oil production at the giant Liza field marked a significant turning point for Guyana. For the first time in its history, the country was presented with a viable opportunity to change its fortunes and potentially transition to one of the wealthiest nations in the world.

Now, two years later, the country is in the midst of a massive construction boom and major influx of foreign direct investment. Investor confidence is at an all-time high fuelled by the string of ongoing discoveries Exxon has been making off the country’s coast, which now exceed 22.

Expert says major oil discoveries outside of Stabroek Block almost certain

The Irfaan Ali-led administration has also been clear in demonstrating that the country is open to investment and development of its vast hydrocarbon resources.

“What is about to unfold in this country is unbelievable,” Mr. Ali told those gathered at the Guyana Manufacturers and Services Association (GMSA) Dinner and Awards Ceremony on December 3.

Vice President, Dr. Bharrat Jagdeo has been adamant that even as the world moves towards renewables, Guyana has a right to commercialise the over 10 billion barrels of oil equivalent Exxon has found since 2015.

Guyana has 3rd highest crude oil reserves in Latin America-Caribbean region

“Guyana’s per capita income is now $6,000. Our people have a legitimate expectation of prosperity too. The United States is 70 odd thousand dollars per capita. The other developed countries are within that range or a little bit lower. So, we have a legitimate expectation to grow the per capita income, and rapidly too. This industry can contribute to that,” Mr. Jagdeo told participants at the Offshore Technology Conference in August.

Guyana’s oil production is set to skyrocket in the next 5 years. The Yellowtail Development, which is currently pending government approval, will add 250,000 barrels of oil per day (bpd) to the 120,000 bpd from Liza Phase 1, 220,000 bpd from Liza Phase 2 and 220,000 bpd from Payara, ramping up total production to more than 800,000 bpd by 2025/2026.

Analyst says Guyana remains on path to massive growth but all efforts must be made to ensure rural communities aren’t left behind

U.K. based consultancy group Wood Mackenzie says its analysis show phased development will lift output to over 1.1 million b/d by 2028. Guyana, it said, will become just the 11th nation in oil’s history to reach the million b/d milestone.

“The giant oil fields will deliver untold riches to this nation of only 0.8 million people,” WoodMac said, adding that Guyana will, as output builds, rise to be king of the heap. “Production per capita will eclipse even that of the leading Middle East producers, Kuwait, UAE and Saudi Arabia.”

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