By: Rebecca Theodore
April 14, 2023
As the world transitions to a low-carbon economy, international energy companies are investing heavily in fossil fuel exploration and production in Guyana. Reinforced by favorable geology, escalating petroleum infrastructure and low breakeven prices, Guyana’s oil is now enticing significant interest with major energy companies globally.
Indeed! Guyana is now emerging as the most recent power oil play in Latin America and the world.
Although issues such as the impact of COVID-19, renewable energy, and economic studies pervade the reputation, according to Rystad Energy, “the facts are that, when you analyze Guyana’s oil sector, even with just a focus on the current 33 discoveries and the 11 billion recoverable barrels in the Stabroek Block, the projection is that only Saudi Arabia, Brazil, and the United Arab Emirates will produce more oil on an annual basis.”
Besides, prolific exploration and a steady pace of Final Investment Decisions [FID] now propel Guyana to be the world’s fourth offshore oil producer by 2025.
With Rystad predicting that Guyana will be pumping 1.7 million barrels daily by 2035, and Exxon Mobile forecasting that the Stabroek block will propel Guyana from a relatively small producer to a global leader in the coming years, Guyana’s position as a competitive and policy-friendly player for offshore production is further solidified.
Moreover, the International Monetary Fund further projects that Guyana’s economy has grown by 86 percent last year, the fastest rate in the world.
According to the U.S. Geological Survey the sedimentary basin in the Stabroek Block could indeed be the world’s last great offshore oil boom. As a result, economic analysts now predict that Guyana’s production will reach 1.2 million barrels daily by 2027, to become the third largest oil producer in Latin America and the Caribbean, making it a top 20 oil producing nation and by far the largest oil producing nation per capita.
According to geologist, the sweet light and medium oil grades found in Guyana have a relatively low carbon cost to extract and refine, especially when compared to the heavier sourer grades typically found in South America.
For these reasons, Georgetown’s inaugural oil auction now garner extensive attention, chiefly with Guyana at the top of the leaderboard for yielding the most oil discovered globally since 2015.
Coupled with the fact that Guyana’s offshore oil fields are of the most competitive supply sources outside of the Middle East and offshore Norway, and are cheaper than the US onshore heavyweight, and the Permian, and Russia sources; those characteristics further enhance the attractiveness of investing in offshore Guyana and is attracting considerable investment from international oil companies.
In fact, aside from the fact that Guyana is one of the lowest-cost jurisdictions in Latin America for energy companies to operate in, the prolific Stabroek Block where Exxon’s strip of world-class finds has produced 11 billion barrels of recoverable oil resources, it is believed that another 25 billion barrels are waiting to be discovered.
With Rystad predicting Guyana will be pumping 1.7 million barrels daily by 2035, it seems that Guyana has now emerged as an elite top-five global producer and that the sedimentary basin could indeed be the world’s last great offshore oil boom.
(Rebecca Theodore is an international journalist and syndicated Op-ed columnist based in New York City. She writes on the platform of politics, national security, human rights and climate change, and now reports on the oil and gas industry in Guyana in reference to the United Nations Sustainable Development Goals agenda. Follow her on twitter @rebethd)
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