In four years, Guyana went from first discovery to first oil, a fast time frame in an industry where it takes years to bring major energy projects online. The former British colony is now a major South American oil producer and global oil exporter. As a result, Guyana is benefiting from significant economic headwinds along with the country. It is the world’s fastest growing economy. By 2022, the gross domestic product (GDP) has grown by an impressive 62 percent. Industry consultants and the government in Georgetown expect that Guyana will. 1.2 million barrels of crude oil per day In the year By 2027, this figure will exceed that of many OPEC members. Exxon’s commitment to develop the 6.6-million-acre Stabroek block suggests oil production could go even higher. This has the potential to change global energy market dynamics and challenge the pricing power of the OPEC Plus alliance.
Guyana data Ministry of Natural Resources At the end of July 2023, the country of less than one million people was pumping 351,600 barrels of oil per day. That volume of production by the Lisa Destiny and Unity floating product storage and offloading vessels (FPSOs) is greater than their combined nameplate capacity. 340,000 barrels per day. Exxon, which owns and operates the Stabroek Block with a 45% stake, has prioritized the development of the block due to the Lisa oilfield’s low price of $25 to $35 per barrel by the end of 2020 and high quality light sweet crude oil. . He saw that The world’s energy will increase the activity In a major exploration drilling campaign that yielded more than 30 discoveries and more than 11 billion barrels of oil resources in the Stabroek Block.
Since the first oil discovery in the Stabroek block was made in 2015, a consortium led by Exxon, Hess, with a 30% interest and CNOOC, with a 25% stake, has approved Phase-1 and six projects from the first Lisa. 2 developments completed. Four additional operations are being developed that, when commissioned, will increase oil production to at least 1.2 million barrels per day and possibly more. These include the 220,000 bpd Payara operation, with first oil due in late 2023, and the 250,000 bpd lowtail project in 2025. Earlier this year, the union approved $12.7 billion. 250,000 barrels per day Uru projectProduction is expected to begin in 2026. In recent news, Exxon and its partners have announced that they will proceed with the sixth development in the successful Stabroek block. The Wiptel project is worth about 13 billion dollars. This facility consists of 72 wells with a drilling capacity of 250,000 barrels per day and will be operational by the end of 2027.
Once all these assets are operational, Exxon will have the capacity to lift more than 1.3 million barrels per day from the Stabroek block. Each operation, such as LISA’s Stage-1 and Stage-2 FPSOs, has the potential to absorb more fuel than its assigned capacity. As a result, oil output from the Stabroek block could easily exceed the expected 1.3 million barrels. In the year By 2027, Guyana’s petroleum production could well exceed the forecast of 1.2 million barrels per day, putting the country ahead of most OPEC members and becoming the world’s 16th largest oil producer.
Huge international interest in Guyana is being driven by the high rate of exploration success and high offshore oil potential, which exceeds estimates by the US Geological Survey. Lisa’s grade API gravity of 32 degrees and 0.58% sulfur content is being obtained, making it easy and cheap for refineries to process into high-quality fuel, adding to the popularity of offshore Guyana. According to Rystad Energy, The carbon content of the extracted oil It is one of the lowest globally. This is an extremely attractive feature for foreign energy companies at a time when big oil is under pressure to drastically reduce emissions and become carbon neutral. Low industry prices, estimated at an average of about $28 per barrel in Ristad, are in coastal Guyana, particularly in Brent sells to the area $90 per barrel.
For those reasons, Guyana’s rising petroleum production will not stop at 1.2 million or 1.3 million barrels per day, and discovered oil reserves will not remain at around 11 billion barrels, both expanding at a strong clip. Earlier this year, Guyana’s Environmental Protection Agency green-lit the Exxon 35 well drilling campaign for the Stabroek block, which, based on high success rates, could lead to additional oil discoveries. Other foreign energy companies are investing in Guyana’s offshore exploration assets and drilling operations. Georgetown’s first oil auction, which has been delayed several times since December 2022, has attracted strong interest. Brazil’s national oil company Petrobras is considering investing in Guyana, while French supermajor Total Energy, which has made five commercial discoveries in nearby Block 58 offshore Suriname, has interests in Guyana’s Kanje and Kanuku blocks.
Guyana’s growing production and proven oil resources will boost global supply at a critical time, reducing the impact of the OPEC Plus cartel. Recognizing this and Guyana’s huge oil potential, OPEC is trying to get the former British colony to join the ranks. The cartel has invited representatives from Guyana to its meetings in Europe, but has not officially invited the country to join the cartel. Regardless, Georgetown appears to be slow to join OPEC, especially with membership that requires Guyana to comply with various rules and regulations. Indeed, such a move would impose restrictions on Guyana’s oil industry by demanding compliance with OPEC Plus production quotas, a key factor in the region’s neighbours. Ecuador left the cartel. In 2020.
Guyana’s emergence as a major global oil producer, going from first discovery to first oil in just four years, challenges OPEC’s dominance. When combined with the plan to be in Brazil The world’s fourth largest producer, South America will re-emerge as a major oil-producing region with the potential to challenge OPEC Plus’ role as global price-setter. In the year All of these are significant developments for the world’s largest oil consumer, the US, Gulf Coast refineries since President Donald Trump’s inauguration in 2019. Sanctions on Venezuelan oil They have been looking for alternative sources of supply. It also obscures the Saudi government’s hostile attitude towards the US, which is responsible for rising oil prices.
By Matthew Smith for Oilprice.com
More top reads from Oilprice.com: