With the rapid convergence of early general elections and the coming of “first oil,” the stage is set for a most interesting next nine months in Guyana. Whatever happens, the oil will flow, and Guyana will have entered an oil epoch. – IPD Latin America’s Kevin Ramnarine

IN FEBRUARY 2017, I captioned an article about the Guyana-Suriname basin, The New North Sea, comparing ExxonMobil’s discoveries in Guyana to discoveries in the Norwegian North Sea starting in 1969.

When I wrote that article, ExxonMobil announced its success with the Payara-1 exploration well after two years of drilling in the Liza area, in its 6.6 million-acre Stabroek Block. After Payara-1 came a string of discoveries — 13 in all. ExxonMobil’s most recent estimate for total recoverable reserves is 5.5 billion oil equivalent barrels. Not included are the reserves in some other discoveries that are still being studied. As exploration continues this number will keep growing. More recent discoveries in 2019 like Haimara have been reported as gas condensate-bearing sandstone.

ExxonMobil expects production to reach 750,000 barrels of oil per day by 2025, which would require five floating production storage and offloading (FPSO) vessels. Guyana’s oil production could eclipse the one million barrels per day mark towards the end of the next decade. That level of production would make Guyana one of the biggest oil producers in the world on a per capita basis, placing them in a league with countries that have high levels of production and small populations such as Kuwait, Qatar and Oman. On an absolute basis, Guyana would be producing almost as much oil as the United Kingdom and more oil than larger countries like Colombia and Indonesia.

Assuming an oil price of US$60 per barrel and current projections for oil production from 2020 to 2030, Guyana will realise a revenue stream starting at greater than US$300 million per year in the early years, which will increase to more than US$6 billion per year by 2026. The lower revenue in early years is due to ExxonMobil recovering its capital expenditure outlay using the cost recovery mechanism in its contract. Not surprisingly, Guyana was listed as the fastest growing economy in the world.

Read the full article here:  https://newsday.co.tt/2019/07/18/guyana-enters-the-oil-age/