ExxonMobil says Guyana could be the largest oil producer in South America’ – Routledge tells int’l oil conference

May 13, 2024 News

---

Kaieteur News – Discussions of Guyana’s future as a regional and global powerhouse took center stage in a discussion panel at Offshore Technology Conference (OTC) 2024 – World Oil reported.

Featured speakers included Kester Hutson and Richard Rambarran of the Georgetown Chamber of Commerce and Industry (GCCI); Alistair Routledge of ExxonMobil Guyana Limited (EMGL); and Deodat Indar and Peter Ramsaroop—Minister within the Ministry of Public Works and the head of the Guyana Office of Investment (Go-Invest), respectively.

From the private sector to government involvement, the panel delved into the optics of Guyana’s “outsized role” to play in the global oil and gas industry, despite the country’s small geographic size. Massive resources: Kester Hutson opened the panel, describing the initial 2015 discovery of Guyana’s reserves as a “monumental shift in economic fortunes” for the country. The pace of progress has been swift, with efforts underway to achieve 1.2-MMbopd production by 2030. The country also aims to establish a “monumental” gas project to make use of the natural gas resources and cut domestic electricity costs—a move that would pave the way for other projects and industry activity.

Development details

Alistair Routledge took the stage next, shifting the conversation into more specifics of production and upcoming projects offshore Guyana on the part of ExxonMobil—one of the earliest majors offshore Guyana. Routledge has high hopes for the future of Guyana’s industry, predicting that the country could be the largest producer in South America—second only to Brazil—within the next decade. Even so, ExxonMobil’s focus has been on the Yellowtail, Uaru and Whiptail projects for the present, the latter two of which mark the company’s fifth and sixth projects in the region.  The Yellowtail project includes a new FPSO, which is expected to come online in 2025, and joins the existing FPSOs—Liza Destiny, Liza Unity and Prosperity—as the company’s fourth vessel in the region. While Routledge only touched briefly on the details of the Uaru project, he had a prospective start date for the more recently announced Whiptail project: end-2027. The cumulative production of all six projects is estimated at 1.3 MMbopd, once they are operational. Routledge also noted the addition of 500 km of new flowlines on the seabed and over 250 new wells by the time all six projects are operational.

Chairman and Chief Executive Officer (CEO) of ExxonMobil Corporation, Darren Woods recently stated that he believes the oil and gas developments in Guyana can go down as one of the best deepwater developments in industry history. During a CNBC interview, Woods spoke about ExxonMobil’s operations in Guyana. “If you look at Guyana and the development there, I think it will go down as one of the best deepwater developments in the history of the industry,” he said. ExxonMobil Guyana announced the discovery of oil in 2015 and swiftly moved to commence production activities by 2019. The company had received an award last year for the rapid pace its affiliate; ExxonMobil Guyana Limited was able to develop the country’s first oil project, Liza One. The success did not end there however, as more than 11 billion barrels of oil have since been discovered in the Stabroek Block. The rapid discoveries have transformed Guyana to the world’s fastest growing economy, boasting the world’s largest discoveries in a decade.

ExxonMobil is the operator of the Stabroek Block with a 45% interest, while Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest. Hess Corporation has agreed to sell all of the company’s shares to Chevron Corporation, through a US$53B transaction. This deal affects Hess’ global assets, including its share in the Stabroek Block. ExxonMobil filed for arbitration since the oil giant believes it has preemptive rights, which allow shareholders access to stock before it is offered to others.

Financial strategy: Following Routledge, Peter Ramsaroop shifted the conversation to Guyana’s strategy for the country’s recent influx of revenue. He was emphatic that “the Dutch disease doesn’t apply to Guyana,” and he displayed strong optimism for the country’s current “tiger economy.”  GDP growth seems to support the tiger economy labelling, with 60% growth in 2023 and a projected 43% growth or 2024—11% of which, Ramsaroop pointed out, is non-oil growth.  He emphasized that in future conversations about climate, food and energy security, Guyana would “have a seat at the table,” and Ramsaroop cited various investments into infrastructure—including hotels, scholarships and hospitals—as evidence of the country’s dedication to create a stable environment for investment.  As Routledge touched on earlier, Ramsaroop also mentioned the country’s future plans to make use of natural gas resources to cut power costs by 50%, as soon as end-2025.

Maintaining the swift pace: Deodat Indar, Minister within the Ministry of Public Works, shared similar sentiments, emphasizing the pace of accelerated growth that Guyana is undertaking in the pursuit of oil and gas and other infrastructure projects.  He mentioned the recent approval of Whiptail as one example, and he referenced future drilling prospects that had garnered interest from such companies as QatarEnergies, among others.  The swift pace, he said, was akin to cramming “30 years of development into three.” In closing, Indar made a point to mention briefly recent claims by Venezuela on Guyanese offshore territories.  Though he did not go into great detail, he mentioned prior agreements in place and did not indicate that the claims would affect current projects.

The panel was, on the whole, focused on a largely positive outlook for Guyana’s future oil and gas industry.  Routledge, in particular, seemed to indicate that Guyana’s future would begin expanding into the gas sector as soon as next year, with an existing oil industry that has the potential to continue expanding operations.  Guyana’s government, meanwhile, seems optimistic on turning this revenue into infrastructure that could support industry operations for years to come.

 

---

• Development details, ExxonMobil, QatarEnergies, Richard Rambarran, Stabroek Block

---