Major Offshore Oil Finds To Transform Guyana

Guyana may soon become one of the top 10 oil producers in the world.

An impoverished former British colony on the northern coast of South America is about to witness the world’s next oil boom.

By 2025, Guyana, with a population of approximately 800,000, is forecast by the IMF to produce up to 750,000 barrels of oil a day. Some are even more bullish. “Our view is that, depending on development progress, the Guyanese production can surpass 900,000 barrels per day in 2025-2027,” says Marcelo de Assis, head of Latin America upstream research at Wood Mackenzie.

That means that Guyana would be one of the top 10 oil producers in the world. The 15 discoveries made by Exxon so far might also upend re-gional oil markets, de Assis says. “If these developments materialize, Guyana will move from zero production to the fourth- or third-largest oil producer in Latin America, behind Brazil, Mexico and maybe Venezuela.”

In late December, an Exxon Mobil–led consortium that includes Hess Corporation and China National Offshore Oil Corporation began pumping crude from the Liza oil field, well off Guyana’s coast, with plans to ramp up production to 120,000 barrels per day in the near future. The Stabroek block, where the well is located, contains 6 billion barrels of recoverable oil and gas, Exxon Mobil estimates.

Yet, not all of Guyana’s oil find may be realizable. De Assis says the characteristics of the oil, which is both heavy and sour, raise questions whether the discoveries are technically and commer-cially viable. Sour crude oil contains a high proportion of sulfur, a major contributor to harmful automotive and marine emissions.

It will take some time to receive revenue from the oil. Still, Guyana’s President David Granger said the scale of the find will herald “a decade of development,” pledging that “every Guyanese will benefit from petroleum production. No one will be left behind.”

Other countries in the region may share in the bonanza. Last month, US-based Apache Corporation and France’s Total announced another major oil discovery off the coast of Suriname, next door to Guyana’s sprawling Stabroek block.