Guyana to earn US$ billions from oil and gas production

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Guyana to earn US$ billions from oil and gas production

Friday, December 06, 2019

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GEORGETOWN, Guyana (CMC) — London-based global information provider, IHS Markit, says Guyana's consistent exploration success will be a plus even in a challenging oil price environment.

An article on the company's website said more discoveries outside of the Stabroek block were essential for the country, proving that its potential stretched way beyond one field.

“The Guyana basin is successfully positioning itself as one of the most exciting emerging, deep-water exploration basins around the world,” IHS Markit stated.

Since 2015, ExxonMobil and its partners have made 14 discoveries, totalling more than six billion recoverable barrels of oil equivalent. The Liza field, the first discovered by ExxonMobil, is expected to start producing by year-end.

More recent discoveries include those by Tullow Oil and its partners in the Orinduik block. According to IHS Markit, these are expected to have a significant impact on the lives of Guyanese.

Minister of Natural Resources, Raphael Trotman shared similar sentiments during a recent local radio interview.

Quoting a RYSTAD Energy report, the minister said Guyana's projection was exceptional.

“RYSTAD Energy has updated its projections of Guyana's earnings of US$120 billion … US$120 billion, that's the Guyana Government's take, and by Guyana Government, the people of Guyana,” Trotman noted.

His comment was in response to a question about the Guyana/ ExxonMobil deal and how much the country stood to benefit.

“The maximum is 70 and the minimum is 45 and Guyana finds itself taking in 59 per cent, ” the minister further explained.

Quoting RYSTAD again, he explained that even at a lower oil price, the country would still benefit.

“At a low price of oil, GY$10,000 per barrel, Guyana will still earn approximately US$51 billion,” Trotman said.

However, IHS Markit predicts that the total capital investments for the development of the fields in the two blocks will be close to US$63 billion over the life of the field.

The majority of this investment, the company said, is directed towards the Liza field, followed by Turbot, Ranger and Pluma.

Additionally, all fields expected to be developed and brought online within the Stabroek and the Orinduik blocks have showcased a positive internal rate of return, from 10 per cent to 52 per cent with the Liza field leading.


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