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Guyana’s oil projects pumping more than US, Canada, Mexico and Brazil – new IEA Report reveals
Kaieteur News – A new report by the International Energy Agency (IEA) has put Guyana’s oil projects at the top of the charts for the highest daily production capacity when compared with projects in Brazil, the United States, Canada and Mexico.
According to the report, Oil 2024 Analysis and Forecast to 2030, four of Guyana’s sanctioned oil projects will each be producing at a higher rate, compared with 19 projects in Brazil alone. The data compiled by the IEA shows that oil production in Brazil will range from 50,000 barrels per day (bpd) to 225,000 bpd at other projects. In the meantime, production in Guyana ranges from 220,000 bpd to 250,000 bpd.
Notably, the three projects listed by the IEA- Payara (220,000 bpd), Yellowtail, Uaru and Whiptail (250,000 bpd each) is also expected to outproduce sanctioned projects in the US, Canada and Mexico. According to the document, projects in the US are expected to produce between 60,000 bpd and 150,000 bpd. Meanwhile, oil production in Canada varies between 30,000 bpd and 140,000 bpd. Projects in Guyana will also be producing more oil than Mexico, which is expected to produce between 80,000-100,000 bpd.
It must be noted that while projects in Guyana are producing more oil than those countries listed by the IEA, this country is yet to implement measures to verify the daily rate of production by the operator of the Stabroek Block. Since 2019, Guyana has relied on the operator of the Stabroek Block, ExxonMobil Guyana Limited (EMGL) to report the daily number of barrels being produced offshore, in the absence of its independent meters.
The company has also pushed production well beyond the initial design rate of the three Floating Production, Storage and Offloading (FPSO) vessels, sparking concerns that the project life will be reduced significantly. This is particularly concerning since Guyana has not ring-fenced any of the projects in the Stabroek Block but is anticipating greater profits from the sector in the latter days. A ring-fencing provision would prevent ExxonMobil from using revenues from one project to pay for expenses at another project. In this manner, Guyana would receive a greater share of its oil profits after the cost of each project is repaid.
The Stabroek Block partners- Exxon, Hess and CNOOC- invest in the development activities and are allowed to deduct 75% of the monthly revenue to recoup its costs. The remaining 25% is shared with Guyana as profits.
It should also be noted that although ExxonMobil is producing oil at a higher rate compared to other projects globally, this nation is still to receive an unlimited parent company guarantee to protect it from the financial burdens of a potential spill.
Presently, Guyana has a US$600M oil spill insurance policy per event and a US$2B guarantee lodged by the Stabroek Block partners.
ExxonMobil holds a 45% interest in the Stabroek Block, while Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.
Presently, ExxonMobil is producing over 640,000 bpd in the Stabroek Block at the Liza One, Liza Two and Payara projects. The government of Guyana has approved six developments to date for the operator to meet its projected production capacity of 1.3 million bpd by 2027.
Table showing Guyana’s oil production capacity compared to other select projects in the US, Mexico, Canada and Brazil
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