Guyana is emerging as the hub of petroleum exploration in South America. The country’s eponymous Guyana Basin and the inland Takatu Basin are already home to multiple oil wells, developed and maintained by global oil and gas majors like Shell, Total and ExxonMobil. The prospect of finding new oil and gas fields has led to increased interest in the region.
The pace of Guyana’s economic growth has increased due to its natural resources. The race for new petroleum reserves has intensified with ExxonMobil, Repsol, Century Guyana Ltd. and CGX, all competing for a share of the pie. The Petroleum Division of the Government of Guyana’s Geology and Mines Commission, the state regulator for the local petroleum industry, is considering proposals from other companies as well.
In May 2015, ExxonMobil announced the discovery of a vast new offshore reserves about 200 km off Guyana’s coastline, marking its entry into the big league of oil rich nations. The 5,433 metre deep Liza-1 well is situated 1,742 metres below the sea surface, and was the first well on the 26,800 sq.km Stabroek block.
Its expected output, according to experts, is estimated at 700 million barrels, making it one of the biggest finds on this side of the Suez. It is expected to contribute more than $40 billion to the South American nation’s economy. The country’s nascent oil and gas industry is expected to gain access to foreign investment and technology as it develops further.
The discovery has not gone unnoticed in neighbouring Venezuela which has some long standing disputes with Guyana. The new find has made news around the world with ExxonMobil and Hess reporting that total output from Liza-1 could reach 750,000 barrels per day (bpd) by 2025. This would significantly expand the country’s oil sector.
ExxonMobil has an extensive local presence in Guyana with Georgetown being its main base of operations. Its local subsidiary, Exxonmobil Guyana has been at the forefront of new discoveries in the country with 14 new discoveries since 2015. By 2020, the company will begin producing up to 120,000 bpd from Liza 1 alone.
ExxonMobil currently holds licenses for the Stabroek, Canje and Kaieteur offshore oil fields.
The following is a comprehensive industry outlook for Guyana’s oil and gas sector, including market research and trade data.
At the turn of the New Millennium, the Guyana-Suriname Basin was estimated to have the world’s second largest untapped oil and gas reserves. A conservative figure puts the total volume at a whopping 13.6 billion barrels of oil and 32 trillion cubic feet of gas. The region has been on the radar of global oil companies ever since.
US and European oil majors like Exxon, Esso, Hess, Repsol and Anadarko have led exploration activities in the area, as have Total, Tullow Oil, and Canada’s CGX Energy. Guyana’s Ministry of Natural Resources (MNR) is also considering giving licenses to several other companies in the near term.
The country’s economic outlook never looked brighter. The Liza wells alone are likely to bring in a lion’s share of much needed revenues for a country which has long suffered from a lack of development. It is expected to generate employment opportunities for thousands of skilled workers. Though estimates vary, no less than 5.5 billion barrels of oil and gas reserves – and likely much more- is expected.
The implications for social development and economic growth are clear: sustainable resource management, revenue generation and infrastructure development will hold the key to changing the fortunes of Guyana. ExxonMobil’s production plans for Liza-1 and Liza-2, have already received government approval and implementation is currently in progress.
The output from these two projects could reach a combined total of 340,000 bpd, increasing gradually to 750,000 bpd by the middle of the next decade. To put things into perspective, this number is the same as the entire population of Guyana. In 2019, ExxonMobil is intensifying offshore surveys even as it works with the government to finalise the project’s Production Sharing Agreement (PSA) terms.