Woodmac: Guyana could become regional oil powerhouse

Guyana, a non-oil producing country resting on the northern coast of South America, might soon become an oil and gas powerhouse in the region.

This is according to the energy analytics company Wood Mackenzie, whose analysts commented on Guyana’s energy potential following Exxon’s report on Thursday of yet another offshore oil discovery in the country’s massive Stabroek offshore block.

As reported on Thursday, Exxon has made a fifth oil discovery in a row in the block, after drilling the Turbot well, adding to Exxon’s previous discoveries at Liza, Payara, Snoek and Liza Deep wells, all sitting in in the 26,800 square kilometers large Stabroek Block.

Following completion of the Turbot-1 well, the Stena Carron drillship will move to the Ranger prospect. An additional well on the Turbot discovery is being planned for 2018.

Deepwater still attractive

Pablo Medina, Wood Mackenzie’s senior analyst, Latin America Upstream said on Thursday: “ExxonMobil continues with its successful exploration campaign offshore Guyana with the discovery of Turbot. This shows that deepwater can still be attractive. After today’s announcement, ExxonMobil’s Liza and Payara complex might approach the 2 billion barrel mark in commercial reserves.”

“ExxonMobil’s Latin America footprint has increased significantly with its recent streak of discoveries in Guyana and its aggressive bidding in Brazil’s latest licensing round,” Medina added.

According to Wood Mackenzie, Exxon’s discoveries also put Guyana on the map as the country currently does not produce any oil.

“We expect around 350,000-400,000 b/d of oil production by 2026, making Guyana one of top oil producers in Latin America,” said Medina.

Worth noting, in a podcast shared by Woodmac, Medina, said the whole Exxon-Guyana story was one of the most interesting, at least when it comes to the deepwater segment, given the number of discoveries in a small portion of the giant block.

Also, Medina said that the 2 – 2.5 billion barrel mark estimated by Woodmac comes only from oil. If available gas is taken into consideration, the barrel of oil equivalent number could rise to 3-4 billion barrels.

While Woodmac expects big production numbers by 2026, first oil is not expected before 2020, when Exxon plans to bring the first phase of the Liza development online, using an FPSO supplied by SBM Offshore.

Phase 1 is expected to cost just over $4.4 billion, which includes a lease capitalization cost of approximately $1.2 billion for the FPSO unit.

Listen to the full podcast below, in which Wood Mackenzie’s Pablo Medina and Matt Blomerth discuss Guyana, Exxon’s Brazilian aspiration, but also an increasing interest by oil companies in the offshore Suriname area, where they are hoping to replicate exploration successes Exxon has made in the nearby Guyana.

Offshore Energy Today Staff