Guyana on course to surpass Venezuela in oil production
– economist predicts 700,000 barrels per day by 2025
With its current production of 100,000 barrels of oil per day, Guyana could very well surpass its next-door neighbour Venezuela, once an oil-producing powerhouse, when it comes to oil production.
This is according to an S&P Global Platts report, which quoted Inter American Development Bank (IDB) Energy Economist Lenin Balza who was at the time speaking at a Platts Petroleum and Energy Virtual conference focused on the Americas.
“I believe we can see Guyana producing more than 700,000 b/d by 2025. If Guyana continues this trend, it is going to surpass Venezuela […] of course Venezuela has its own problems right now,” he said.
Venezuela has steadily turned up its rhetoric when it comes to its claim to Guyana’s Essequibo region and maritime zone, where the oil production is taking place, since oil was discovered in the Stabroek Block by ExxonMobil in 2015.
In recent months, Guyana has been forced to endure a ramping up of aggression by the Venezuelans, including incursions into Guyana’s maritime and airspace. The most recent of these incursions was earlier this month, when two Russian-made Sukhoi SU-30 fighter jets belonging to Venezuela flew over the Region Seven village of Eteringbang.
This occurred a little over a month after Venezuela illegally detained 12 local fishermen in Guyana’s maritime space. The vessels, Lady Nayera and Sea Wolf, and their crews were operating off the coast of Waini Point in Guyana’s Exclusive Economic Zone (EEZ) when they were intercepted by a Venezuelan naval vessel illegally traversing Guyana’s waters.
After local and international outcry that included Venezuela being summoned to the Organisation of American States (OAS) Permanent Council, the fishermen were released and returned home.
S&P Global Platts meanwhile, also referenced another of Guyana’s neighbours, Brazil, in discussions about oil and gas. In a recent Platts report, it was pointed out that Brazil has to now compete with Guyana and Uruguay in order to secure oil investments from around the globe.
“The current scenario requires flexibility because Brazil now faces competition for oil investments from countries around the globe, including neighbours such as Guyana and Uruguay, officials said. The two countries both plan licencing sales in 2021, with Guyana drawing intense interest after ExxonMobil made 18 discoveries in the Stabroek Block,” the report stated.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being banked in the New York Federal Reserve Bank, where it is earning interest.
ExxonMobil has also established an ambitious oil exploration plan for 2021 offshore Guyana. Over the past few weeks, Exxon, the only company to have found and started producing oil in local waters, has been making preparations to drill simultaneous deepwater wells in both the Stabroek and Canje Blocks.
And prior to January month-end, Exxon was producing 130,000 barrels of oil per day (bpd). However, in the latter part of January, the company had announced that it was experiencing technical problems with the seal on its Liza Destiny Floating Production Storage and Offloading (FPSO) vessel’s flash gas compressor. The problem resulted in Exxon having to reduce its production to 120,000 bpd and also conduct routine flaring.
Canadian-owned CGX Energy also has plans to drill wells this year. Its Kawa-1 well, which is earmarked for the Corentyne Block, will be drilled to a depth of approximately 6500 metres in 370-metre-deep water.
On the other hand, its Makarapan-1 exploration well will be drilled in the Demerara Block to a total depth of approximately 3500 metres in water depth of approximately 1000 metres.