Petroleum industry in Guyana

Last updated

Petroleum industry in Guyana is rapidly evolving. Guyana has emerged as one of the newest petroleum producing regions in the world, achieving its first commercial grade crude oil draw in December 2019. Crude oil is sent abroad for refining. [1] [2]

Contents

Since the onset of production, Guyana has experienced a rapid increase in oil output, with production levels reaching approximately 645,000 barrels per day by 2024. This significant growth has not only transformed the nation's economic landscape but has also positioned it as the third-largest non-OPEC oil supplier globally. With plans to further increase production to about 1.3 million barrels per day by 2027, Guyana is set to significantly expand its influence in the global oil market, presenting new economic opportunities and challenges for the country. [3]

Early Explorations

Historically, Guyana was a net importer of fuel. [4] Guyana's offshore Guyana Basin and the inland Takatu Basin have attracted foreign companies such as Shell, Total and Mobil since the 1940s, who completed much geological surveyance of the area and drilled a number of wells. [5] In the Takatu Basin, 3 wells were drilled between 1981 and 1993, however they were dry or not found to be commercially viable. [6]

Offshore oil exploration began in the 1950s, and 9 wells were drilled between 1965 and 1970, only one of which struck oil, Abary-1 well in the Kanuku  license area. In the late 1980s, Mobil, Total, Guyana Exploration and BHP continued exploration in the region. [6]

In the mid-2000s, CGX Energy attempted to spud a well but the rig was deterred by Surinamese gunboats claiming they were in Surinamese waters. United Nations International Tribunal for the Law of the Sea (ITLOS) settled the border dispute in September 2007 but no further wells were drilled until 2012.

As of 2020, Guyana has nine petroleum blocks under active leases, of which six have had active exploration. [6] The Petroleum Division of the Guyana Geology and Mines Commission has the responsibility of monitoring exploration in Guyana.

2015 Liza Oilfield Discovery

Esso, a subsidiary of ExxonMobil, began exploring the off-shore region in 2008. [6] In May 2015 ExxonMobil announced discovery of more than 90 metres of high-quality, oil-bearing sandstone reservoirs about 200 km off the coastline, [7] considered to be one of the largest crude oil discoveries of the past decade. [8] Subsequent discoveries were made in early 2018 at sites Payara, Liza deep, Snoek, Turbot, Ranger and Pacora. [9]

The Liza-1 well was drilled to 5,433 metres in 1,742 metres of water, and was the first well on the Stabroek block, which is 26,800 square kilometres in size. Early estimates claimed the area contained 700 million barrels of oil (a total value of US$40 billion, international crude price at the time of discovery). Continued discoveries by ExxonMobil and Hess increased that estimate to exceeding 4 billion barrels of oil equivalent, potentially producing 750,000 barrels per day by 2025. [10] Yet another assessment in early 2020 has since elevated the amount to eight billion barrels of oil equivalent. [11]

Liza Phase 1 project in the Stabroek block began producing crude 20 December 2019. [12]

Challenges

Predictions about the windfall of this significant oil discovery made a significant impact on the country, including the 2020 presidential elections. [13] There is also the threat of the oil curse, which affects similar resource-rich countries. [14]

There are also concerns of large international companies getting an unfair share of ownership of oil royalties. [15] [16] [17] Natural-resources watchdog group, Global Witness, reported that Guyana may have lost as much as $55 billion in potential revenue from negotiations that favored Exxon. Exxon refuted the claim based on unaccounted for costs of the high risk involved in exploring the "frontier hydrocarbon province". [18]

Border Dispute with Venezuela

The oil and gas exploration activity by Guyana created a new source of tension with neighboring Venezuela. The 2015 discovery set off a round of recriminations between Venezuela and its eastern border neighbor. Officials in Caracas, which has long had claims on Guyana's Essequibo region, have alleged that the concession is located in disputed waters.[ citation needed ] This wasn't the first off-shore border dispute, as then-President Burnham had addressed the United Nations in 1968 over Venezuelan claims of area up to 12 miles from disputed territories. Prior to this, a border award was agreed upon in 1899 as the result of a case overseen by U.S. Chief Justice Melville Fuller, however in 1954 a memorandum by one of the lawyers was published posthumously, questioning the validity of the award as unfairly to the benefit of British Guiana. [19]

Regulation

Petroleum (Exploration and Production) Act 1986 (PEPA) grants government power over granting licenses for petroleum prospecting and production. [6]

Natural Resource Fund Act 2019 established a fund for government proceeds from petroleum operations, to be operated by the Bank of Guyana. [20]

Related Research Articles

<span class="mw-page-title-main">History of the petroleum industry in the United States</span>

The history of the petroleum industry in the United States goes back to the early 19th century, although the indigenous peoples, like many ancient societies, have used petroleum seeps since prehistoric times; where found, these seeps signaled the growth of the industry from the earliest discoveries to the more recent.

<span class="mw-page-title-main">National Iranian Oil Company</span> Oil and gas company of Iran

The National Iranian Oil Company is a government-owned national oil and natural gas producer and distributor under the direction of the Ministry of Petroleum of Iran. NIOC was established in 1948 and restructured under The Consortium Agreement of 1954. NIOC ranks as the world's second largest oil company, after Saudi Arabia's state-owned Aramco.

The oil and gas industry is usually divided into three major sectors: upstream, midstream and downstream. The upstream sector includes searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells, and subsequently operating the wells that recover and bring the crude oil or raw natural gas to the surface.

<span class="mw-page-title-main">China National Petroleum Corporation</span> Chinese major national oil and gas corporation

The China National Petroleum Corporation (CNPC) is a major national oil and gas corporation of China and one of the largest integrated energy groups in the world. Its headquarters are in Dongcheng District, Beijing. CNPC was ranked fourth in 2022 Fortune Global 500, a global ranking of the largest corporations by revenue.

<span class="mw-page-title-main">Petroleum industry in Nigeria</span> Oil production in Nigeria

Nigeria is the second largest oil and gas producer in Africa. Crude oil from the Niger Delta basin comes in two types: light, and comparatively heavy – the lighter has around 36 of API gravity while the heavier has 20–25 of API gravity. Both types are paraffinic and low in Sulphur. Nigeria's economy and budget have been largely supported from income and revenues generated from the petroleum industry since 1960. Statistics as at February 2021 shows that the Nigerian oil sector contributes to about 9% of the entire GDP of the nation. Nigeria is a major exporter of crude oil and petroleum products to the United States of America. In 2010, Nigeria exported over one million barrels per day to the United States, representing 9% of the U.S. total crude oil and petroleum products imports and over 40% of Nigeria exports.

<span class="mw-page-title-main">APA Corporation</span> American energy company

APA Corporation is the holding company for Apache Corporation, an American company engaged in hydrocarbon exploration. It is organized in Delaware and headquartered in Houston. The company is ranked 431st on the Fortune 500.

The Dalia Oil Field is an oil field in deepwater block 17, 135 kilometres (84 mi) off the coast of Cabinda, Angola. The field lies in water depths varying between 1,200 and 1,500 metres. Dalia oil field was discovered in September 1997 and brought into production in December 2006.

<span class="mw-page-title-main">Petroleum exploration in the Arctic</span> Industry in the Arctic

Exploration for petroleum in the Arctic is expensive and challenging both technically and logistically. In the offshore, sea ice can be a major factor. There have been many discoveries of oil and gas in the several Arctic basins that have seen extensive exploration over past decades but distance from existing infrastructure has often deterred development. Development and production operations in the Arctic offshore as a result of exploration have been limited, with the exception of the Barents and Norwegian seas. In Alaska, exploration subsequent to the discovery of the Prudhoe Bay oilfield has focussed on the onshore and shallow coastal waters.

<span class="mw-page-title-main">History of the petroleum industry in Canada (frontier exploration and development)</span>

Canada's early petroleum discoveries took place near population centres or along lines of penetration into the frontier.

Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. It is the largest oil field in North America, covering 213,543 acres (86,418 ha) and originally contained approximately 25 billion barrels (4.0×109 m3) of oil. The amount of recoverable oil in the field is more than double that of the next largest field in the United States by acreage (the East Texas Oil Field), while the largest by reserves is the Permian Basin (North America). The field was operated by BP; partners were ExxonMobil and ConocoPhillips until August 2019; when BP sold all its Alaska assets to Hilcorp.

<span class="mw-page-title-main">Petroleum industry in China</span> Overview of the petroleum industry in China

The impact of the petroleum industry has been increasing globally as China ranks seventh for oil production and second in crude oil consumption in the world. China imported a record 6.7 million barrels a day (b/d) of oil in 2015 and was forecast "to overtake the U.S. as the world's biggest crude importer in 2016".

<span class="mw-page-title-main">ExxonMobil</span> American multinational oil and gas company

ExxonMobil Corporation is an American multinational oil and gas corporation and the largest direct descendant of John D. Rockefeller's Standard Oil. The company, which took its present name in 1999 per the merger of Exxon and Mobil, is vertically integrated across the entire oil and gas industry, and within it is also a chemicals division which produces plastic, synthetic rubber, and other chemical products. ExxonMobil is headquartered near the Houston suburb of Spring, Texas, though officially incorporated in the U.S. state of New Jersey. It is the largest United States-based oil and gas producing company. ExxonMobil is also the eighth largest company in the world by revenue and the third largest in the US.

Sources include: Dow Jones (DJ), New York Times (NYT), Wall Street Journal (WSJ), and the Washington Post (WP).

<span class="mw-page-title-main">Offshore oil and gas in the Gulf of Mexico (United States)</span> Major petroleum-producing area

Offshore oil and gas in the Gulf of Mexico is a major source of oil and natural gas in the United States. The western and central Gulf of Mexico, which includes offshore Texas, Louisiana, Mississippi, and Alabama, is one of the major petroleum-producing areas of the United States. Oil production from US federal waters in the Gulf of Mexico reached an all-time annual high of 1.65 million barrels per day in 2017. Oil production is expected to continue the upward trend in 2018 and 2019, based on ten new oil fields which are planned to start production in those years. According to the Energy Information Administration, "Gulf of Mexico federal offshore oil production accounts for 15% of total U.S. crude oil production and federal offshore natural gas production in the Gulf accounts for 5% of total U.S. dry production."

<span class="mw-page-title-main">Gulf Keystone Petroleum</span>

Gulf Keystone Petroleum Limited is an independent oil and gas exploration and production company that operates in the Kurdistan region of Iraq. It is also the operator of the Shaikan oil field. The company was listed on the main market of the London Stock Exchange on September 8, 2004. Jon Harris serves as its chief executive officer.

In addition to terrestrial oil wells, Canada also extracts oil via offshore drilling.

<span class="mw-page-title-main">Staatsolie Maatschappij Suriname</span> Suriname oil and Gold company

Staatsolie, officially Staatsolie Maatschappij Suriname, is a Surinamese oil and gold company which was established to execute the oil policy which includes exploration, drilling and processing oil. In 2014 Staatsolie expanded its business to gold. Staatsolie is wholly state-owned.

Melinda Janki is a Guyanese lawyer. She was instrumental in writing into Guyana's 1995 constitution the Environmental Protection Act giving its citizens among the strongest protections of any nation, including "the right to an environment that is not harmful to his or her health or well-being."

References

  1. ↑ "Setting up oil refinery in Guyana even less viable now from when study first done". OilNow. 2020-06-25. Retrieved 2020-12-04.
  2. ↑ GTIMES (2019-10-07). "Oil refinery to be completed by next year – GuyEnergy executive". Guyana Times. Retrieved 2020-12-04.
  3. ↑ KNEWS (2024-05-22). "Guyana is now 3rd largest non-OPEC oil supplier globally". Kaieteur News. Retrieved 2024-05-24.
  4. ↑ Espinasa, Ramon (September 2008). "Prospects for the Oil-Importing Countries of the Caribbean" (PDF). core.ac.uk. Inter-American Development Bank. Retrieved 2020-12-04.
  5. ↑ www.guyanaguide.com
  6. 1 2 3 4 5 "Traversing a Slippery Slope: Guyana's Oil Opportunity | Publications" (PDF). publications.iadb.org. Retrieved 2020-12-04.
  7. ↑ "Guyana".
  8. ↑ Szczesniak, Philip A. "The Mineral Industry of Guyana, 2016" (PDF). USGS . Retrieved 2020-12-06.
  9. ↑ "Guyana | ExxonMobil". ExxonMobil. Retrieved 2018-03-14.
  10. ↑ "Hammerhead-1 Strikes Offshore Guyana".
  11. ↑ "ExxonMobil's Large Offshore Discovery Faces Political Risk | OilPrice.com". OilPrice.com. Retrieved 2016-03-21.
  12. ↑ "Historic draw of first oil arrives". Stabroek News. 2019-12-21. Retrieved 2020-12-04.
  13. ↑ "Huge oil discovery off Guyana raises the stakes in election fraud case". the Guardian. 2020-06-27. Retrieved 2020-12-04.
  14. ↑ "Will Guyana soon be the richest country in the world?". BBC News. 2019-05-08. Retrieved 2020-12-04.
  15. ↑ "Guyana votes amid high hopes over oil discoveries". BBC News. 2020-03-02. Retrieved 2020-12-04.
  16. ↑ "Hess' confirmation of payment of US$30 million raises serious red flags for Exxon". Stabroek News. 2019-11-22. Retrieved 2020-12-04.
  17. ↑ "The 1999 and 2016 Petroleum Agreements Compared – Annexes". Stabroek News. 2018-03-16. Retrieved 2020-12-04.
  18. ↑ "Watchdog group says Guyana lost billions in Exxon oil deal". AP NEWS. 2020-02-03. Retrieved 2020-12-19.
  19. ↑ Arfeld, George (1968-08-21). "U.S. Caught In The Middle". Santa Cruz Sentinel. Associated Press . Retrieved 2020-12-19.
  20. ↑ "Natural Resource Fund | International Forum of Sovereign Wealth Funds". www.ifswf.org. Retrieved 2020-12-05.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.