08/02/2019 | 01:09 GMT |
Guyana, an English-speaking country on South America’s north Atlantic coast on the eastern side of Venezuela, is set to become a major producer of hydrocarbons. Guyana is known for its pristine natural habitat, with a high level of biodiversity, and its population is few than 1 million people. Currently, Guyana does not produce any oil, but major oil companies have been operating in the offshore territories of the South American country, including Exxon, Hess, and CNOOC, and it is on track to attract global oil and gas investments. Major discoveries were made in 2015 when Exxon announced the discovery of the deep-water resources, the Liza-1 field, containing 1.4 billion barrels of oil and gas. Due to its low oil consumption, which is currently estimated at 12 tbbl/d, Guyana may effectively be exporting all of its production of hydrocarbon resources which makes it a potential key producer of hydrocarbons in Latin America by 2020.
To achieve that, the Guyanese government has invested more than $500 million in petroleum processing and pipeline facilities. Furthermore, Guyana represents a strategic interest for US companies after freezing their interests in the Russian fields due to the US sanctions.
Resources are estimated to be more than 5 billion barrels of oil equivalent which makes Guyana a potential player in the oil markets
Exploration is being conducted in three major areas, the Stabroek Block, the Canje Block and the Kaieteur Block. So far 12 discoveries have been in the Stabroek Block which is the largest block with an area of 26,800 square kilometres.
Guyana oil production is expected to reach 750 tbbl/d by 2025 which could transform the whole Guyanese economy. Hess is investing $475 million in drilling activities while Exxon is expected to invest more than $500 million to drill five wells. Exxon estimates the recoverable resources in Guyana to be more than 5 billion barrels of oil equivalent along with newly discovered offshore wells; the Talipia-1 and Haimara-1.
Exxon’s next drilling will take place in Yellowtail-1 well by the drilling ship Noble Tom Madden. Three major companies are operating in the block; Esso (45% share), Hess (30% share), and CNOOC (25% share). Nonetheless, geopolitical challenges in oil exploration continue to exist represented by tensions with neighbouring Venezuela over disputed water borders. However, it is not clear if the situation could change if a political transition happens in Venezuela which is currently facing a historic political crisis.
In the Liza-1 field, 15 wells were drilled, half of which are production wells, while the other half are gas injection wells drilled in order to maintain the reservoir pressure which decreases throughout its lifetime. The Liza-1 field by itself is confirmed to contain 1.4 billion barrels of recoverable oil resources with an expected production reaching 120 tbbl/d to start in 2020 and 750 tbbl/d by 2025 when combined with potential five floating, production, storage and offloading vessels which collects oil produced from the seabed through different wells. That could make Guyana’s production well above the production of many OPEC members countries including Congo, Ecuador, and Equatorial Guinea.