Exxon-led consortium is key to driving Guyana’s epic oil boom

Global oil company Exxon and its partners in the 6.6-million-acre Stabroek Block in Guyana have made over 25 quality discoveries in the South American-Caribbean territory with the crude found being light and sweet with an API of 32 degrees and 0.58 per cent sulfur content.

The latest discoveries were at the Seabob and Kiru-Kiru wells in the Stabroek Block to the southeast of the Payara Project. Exxon also announced that production from the Liza oilfield in the Stabroek Block has exceeded the 340,000 barrels per day initially targeted.

Earlier this month it was revealed that Exxon had lodged an application with Guyana’s Environmental Protection Agency to drill 35 exploration and appraisal wells in the Stabroek Block. When these new areas are considered along with the five discoveries made in the Stabroek Block earlier this year, the drilling campaign is expected to make additional discoveries, boosting the 11 billion barrels already found.

That crude oil is also economic to extract.

Breakeven prices range from US$35 per barrel Brent for Liza Phase 1, US$25 a barrel for Liza Phase 2, which recently came online, and US$32 per barrel for the 220,000-barrel capacity Payara Project, which is scheduled to start production during 2024. 

Guyana’s epic oil boom

While it is the Exxon-led consortium that is key to driving Guyana’s epic oil boom, which will see the country becoming a leading oil producer, other international energy companies are also engaged in exploration drilling. British driller Tullow Oil, which is the operator of the world-class Jubilee field in offshore Guyana, discovered in 2007, announced a 37.5 per cent partnership, Repsol, with TotalEnergies holding the remaining 25 per cent, on the Beebei-Potaro well in the Kanuku Block.

That wildcat well, which comes on the back of the 2020 Carapa medium oil discovery in the block where 13 feet of net oil pay was identified, is targeting a prospect that Repsol estimates contains around 200 million barrels of crude oil. The Kanuku Block lies below the southeastern tip of the Stabroek Block, where Exxon has made nearly all discoveries in offshore Guyana and is believed to lie on the same petroleum fairway.

To the east of the Kanuku Block lies Block 58 offshore Suriname, where TotalEnergies and partner, Apache have made five quality light oil discoveries with modelling estimating the block contains 6.5 billion barrels. Those factors, notably the slew of high-quality oil discoveries made by Exxon in the Southeastern tip of the Stabroek Block, bode well for further finds by Repsol and its partners in the Kanuku Block.

Guyana, the former British colony has emerged as the world’s hottest offshore drilling location. Since 2015 global energy major ExxonMobil as well as its partners Hess Corporation and CNOOC have made a slew of quality oil discoveries in the offshore Stabroek Block, which have delivered resources in excess of 11 billion barrels of oil.

This is driving a massive economic boom for Guyana, which was among the poorest nations in Lain America and the Caribbean. According to the IMF, Guyana’s gross domestic product grew by just under 20 per cent during 2021 and is poised for further strong expansion.

Guyana’s government is expected to bank over US$1 billion in oil revenues during 2022 which according to industry consultancy Rystad Energy will soar to US$7.5 billion by the end of the decade. This will deliver a tremendous economic boom which will see Guyana’s economy grow fivefold over that period. 

Key to this tremendous economic opportunity is the rapid ramping up of crude oil production, with Exxon estimating that its operations will have the capacity to pump 1.2 million barrels per day by 2027, which are further oil discoveries.