Even with its vast oil reserves of over 300 billion barrels, Venezuela’s output is now on course to be surpassed by new producer Guyana where oil fields are moving to development at a robust pace as the government looks to ramp up programmes geared towards bringing about a massive economic transformation in the South American country.
Although exports by state-run Petroleos de Venezuela have stabilized in recent months following a sharp decline between late 2020 and early 2021, the once prosperous oil producing nation continues to struggle with maintaining and increasing output.
Reuters said in a report this week a total of 25 cargoes set sail from Venezuelan waters last month, carrying 688,533 bpd of crude and fuel mainly to China, Malaysia and the United Arab Emirates. Exports to Europe fell to a single cargo of 110,000 barrels from two to three cargoes in previous months. April volumes also represented a 19% drop from the same month a year ago.
Oil production in Latin America has been dominated for years by Brazil, Mexico, and Venezuela which are collectively responsible for about 75% of the region’s total output. But Guyana, with over 9 billion barrels of oil equivalent resources discovered to date and production already underway, is on course to become one of the region’s top producers, potentially second only to Brazil.
Hess Corporation, co-venturer at the prolific Stabroek Block, says it estimates the country will be producing upwards of 1.5 million bpd before the end of the decade.
“It’s one of the major petroleum provinces in the world,” John Hess, CEO of Hess Corporation, said.
Hess is a 30% stakeholder in the Stabroek block, with CNOOC holding 25% and operator ExxonMobil, holding 45% interest.
Of the 18 discoveries made in Guyana since 2015 and another announced last week, three projects have so far been sanctioned – Liza 1, 2 and Payara. ExxonMobil will submit its proposal for a 4th development in the Yellowtail area to Guyanese authorities later this year.
“Basically, we have one ship on production, 120,000 barrels per day. We have five ships that we have in our plan to get to over 750,000 barrels per day by 2026 and we actually have line of sight for 10 FPSOs…for this decade,” Hess said.
And there is more to come. The American Security Project (ASP) says the output projected for Guyana may be an underestimation of the country’s production potential.
“In fact, these production levels may underestimate the country’s production, because they only account for the ExxonMobil/Hess/CNOOC consortium’s license in the Stabroek block. As other oil companies explore elsewhere in Guyana’s waters, they could see similar outcomes,” ASP said in a report.
ASP said unlike other recent discoveries of offshore petroleum resources in places like Israel, Egypt, Australia, or Russia, almost all the reserves in Guyana are expected to be valuable light sweet crude, not harder to monetize resources like heavy oil, which Venezuela has an abundance of.