Guyana’s high quality oil allowed it to survive COVID-19 storm

Guyana’s high quality oil allowed it to survive COVID-19 storm – US Analyst

Jan 30, 2021 News

AMI Analyst, Arthur Deakin

Kaieteur News – As a result of having light sweet crude, Guyana was able to survive the harsh economic pains of the COVID-19 pandemic that hit the world last year. Making this and other comments is Arthur Deakin, an Analyst at Americas Market Intelligence (AMI) in the United States of America.
AMI, a management consultant firm, has been providing insights that unlock opportunities in Latin America via market intelligence, research and analysis.

During his first appearance on the Kaieteur Radio show, Guyana’s Oil & You, Deakin was asked to share his thoughts on how Guyana was able to survive some of the toughest parts of 2020’s COVID-19 pandemic, as opposed to countries that were less fortunate in that regard.

To this, the US Analyst reminded that because Guyana’s crude is lower in sulfur content, it enjoys a high in global demand, but especially in China.
“Both Brazil and Guyana that have this type of oil, in addition to their low breakeven costs, lower than US$40 a barrel. Guyana I think is US$35 for the Phase One of exploration and that price is expected to go down to US$25 in Phase Two of exploration,” Deakin said.
These factors, combined with the appeal for high-quality crude, made it possible for Guyana to come out at the top at this “pretty bad” situation, he added.
When asked to share how he sees 2021 panning out for Guyana, Deakin stated that he holds high expectations that the growth and demand for Guyana’s crude will only increase.

He said with this, “China is really ramping up infrastructure and construction efforts to revive its economy and it’s definitely doing a good job so far. So the demand for this type of oil is going to keep growing, especially as stricter environmental regulations are passed.”

Deakin also mentioned that one of the main reasons for the increasing demand of this sweeter crude was due to the International Maritime Organisation (IMO) passing a law that requires ships to reduce emissions by up to 80%.

“So in 2021, I expect a good year. I expect oil prices to stay around the price where they are or grow a little bit. We see a commitment by some of the major producers to restrict output until there’s greater certainty on oil demands around the world. The panorama is positive,” Deakin concluded.

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