Oil output in Guyana, Brazil, U.S. expected to keep oil prices stable despite lower production from OPEC countries

Oil output in Guyana, Brazil, U.S. expected to keep oil prices stable despite lower production from OPEC countries – IBD

Mar 14, 2024 ExxonMobil, News, Oil & Gas

Exxon’s third FPSO ‘The Prosperity’ which started production offshore Guyana in November 2023.

Kaieteur News – In a recent report titled “Ready for Take-Off,” the Inter-American Development Bank (IDB) highlighted that despite lower production levels from Organization of the Petroleum Exporting Countries (OPEC) countries, the surge in oil output from Guyana, Brazil, and the United States is expected to maintain stability in oil prices.

The report underscores the volatility in commodity prices, particularly oil, throughout 2023. Despite temporary increases triggered by events like the conflict in the Gaza Strip, prices remained on a downward trajectory after Russia’s invasion of Ukraine. Citing data from the International Energy Agency (IEA), the report indicates a drop in OPEC’s oil market share to 51% in December 2023, marking its lowest level since 2016. This decline in OPEC production is set against the backdrop of record output from non-OPEC countries, notably the United States, Guyana, and Brazil.

The IDB’s report sheds light on the macroeconomic landscape, noting that Latin American and Caribbean economies outperformed expectations in 2023, with GDP growth reaching 2.1%. Strong global economic expansion played a significant role in driving this growth, supported by proactive policies and resilient financial markets.

Looking ahead to 2024, the report predicts a deceleration in global economic growth, with market analysts projecting 1.6% growth for the Latin American and Caribbean region. However, the return to long-term average growth of 2% is anticipated by 2025.

The global economic context outlined in the report indicates a gradual slowdown in growth following the COVID-19 pandemic recovery. While the United States experienced improved growth in 2023, forecasts suggest a moderation in growth rates for the coming years. Similarly, growth in the Eurozone and China is expected to remain subdued, with various factors contributing to these projections. Amidst these economic dynamics, the surge in oil production from non-OPEC countries, particularly Guyana, Brazil, and the United States, is poised to offset the decline in production, thereby stabilizing oil prices in the global market.

In Guyana, ExxonMobil Guyana Limited is producing over 645,000 barrels of oil per day (bpd) from three ships in the Stabroek Block—Liza Destiny, Liza Unity and Prosperity. With three projects in operation, Exxon said it looks forward to progressing with Guyana’s Yellowtail and Uaru Projects for which development wells are already being drilled.

The company remains in discussions with government for the approval of Exxon’s sixth project, Whiptail, sometime this year. Collectively, Exxon said Guyana is on track to produce over 1.2 million barrels of oil per day by 2027 from the Stabroek Block.