Guyana welcomes massive expansion


Guyana welcomes massive expansion

Guyana oil expansion

Developments Galore


Amsterdam, Jan 2nd 2023– The year 2024 is expected to welcome a massive expansion of operations in Guyana’s oil and gas industry. New blocks will be awarded, oil developments will advance, and the prospect of gas development will shift into focus.

Here is a list of what to expect:

Signed contracts from offshore licensing round

The government said in October that it decided to award eight oil licenses at the close of its first offshore licensing round.

The awardees are:

  1. S3 – Sispro Inc.
  2. S4 – TotalEnergies, Qatar Energy, and Petronas
  3. S5 – International Group Investment Inc. and Montego Energy
  4. S7 – Liberty Petroleum Corporation and Cybele Energy
  5. S8 – ExxonMobil, Hess, and CNOOC
  6. S10 – International Group Investment Inc. and Montego Energy
  7. D1 – Delcorp Inc., Watad Energy, and Arabian Drillers
  8. D2 – Sispro

Guyana is poised to collect more than US$100 million in signature bonuses. With negotiations underway, the contract awards are expected in the first quarter of 2024. In the first phase of their work programs, operators will commence geotechnical and geophysical studies.

Approval of ExxonMobil’s proposed Whiptail project

The Ministry of Natural Resources is reviewing ExxonMobil’s Whiptail field development plan (FDP) and environmental impact assessment (EIA), with assistance from Bayphase. Approval is expected in the first quarter, followed by final investment decisions by the co-venturers. The projected development cost isUS$12.9 billion.

Whiptail is ExxonMobil’s sixth Stabroek block project. The floating production, storage and offloading (FPSO) vessel will be called Jaguar,after Guyana’s national animal. It will be capable of producing 250,000 barrels of oil per day (bpd). The project is expected to increase Stabroek block production to approximately 1.3 million bpd in 2027/2028, after Yellowtail and Uaru.

Proposal of 7th Stabroek block project

ExxonMobil discovered Fangtooth-1 in 2022, and Fangtooth SE-1 in 2023. ExxonMobil has doneextensive appraisal workon Fangtooth and is expected to make that field the basis of its seventh Stabroek block project. The company is likely to craft and submit an EIA, at the bidding of the Environmental Protection Agency (EPA), and a FDP to the Ministry of Natural Resources. With Guyana’s budget preparations underway, the Ministry is expected to allocate funds to hire a firm to assist with the review.

Oil production at 620,000 barrels per day

The Payara project achieved first oil in November and reached 100,000 bpdin just 16 days. This project is expected to reach nameplate capacity of 220,000 bpd in the first quarter. Adding to the 150,000 bpd Liza-1 project and the 250,000 bpd Liza-2 project. Guyana can easily supply the global market with more than 200 million barrels in 2024, a potential increase of more than 40% over the 135-140 million barrels projected in 2023. The Prosperity FPSO started production offshore Guyana in November 2023

Multi-block exploration drilling

Stabroek:The EPA approved a 35-well exploration and appraisal program for the Stabroek block which, according to its schedule period, should have commenced late last year. Following the announcement of Chevron’s deal to acquire Hess, the oil major’s Chief Executive Officer (CEO), Mike Wirth, said10-12 wells are plannedfor the Stabroek block in 2024.

Canje:The environmental regulator is currently reviewing a proposed 12-well exploration and appraisalcampaign for the Canje block, also operated by ExxonMobil. This campaign is scheduled for commencement in the second quarter of 2024 and will run to the first quarter of 2025.

Corentyne:CGX Energy and Frontera Energy have to conduct more drilling to prove the 514-628 million oil-equivalent barrelsestimated in the Maastrichtian horizonof the northern Corentyne area. The joint venture is in the middle of an appraisal program approved by the Guyana government, which started with the drilling of the Wei-1 well last year, but is yet to announce new wells. Plagued by financial trouble and delays, they are likely to farm out stakes to a third larger company to assist with funding for their work program.

Orinduik:Eco (Atlantic) Oil & Gas Ltd. acquired operatorship and had its interest in the Orinduik block hiked to 75% after buying Tullow’s Guyana subsidiary. Eco has initiated a formal farm-out process. Alongside TotalEnergies and QatarEnergy, the joint venture is in the second and final renewal period of the Orinduik petroleum agreement and isexpected to drillone exploration well.

Finalization of gas development roadmap

Guyana closed a period of public comments on its natural gas strategy discussion paper late last year. The government is expected to incorporate acceptable comments into its strategy. ExxonMobil is being encouraged to shift its focus to gas, having lined up a series of oil projects that will take production offshore Guyana over 1.2 million bpd. Vice President Bharrat Jagdeo said Exxon would have to relinquish its gas discoveries if it is not interested in tapping them, so the government can pursue investment from interested parties. Exxon has been considering opportunities for standalone gas development offshore Guyana, andconducted appraisal drillingon its 2019 Haimara discovery last year, a gas field situated near the Suriname border.

Guyana’s third year spending oil revenues

Guyana started spending revenues from its Natural Resource Fund (NRF) in 2022 after revamping legislation governing the account. It spent about US$607 million in 2021 and approved about US$1 billion for spending in 2023. The formula for withdrawals ensures there are savings every year after the first, and ties withdrawals only to inflows from the previous year. With about US$1.6 billion in expected royalties and oil sales from 2023,approximately US$1.16 billionwill be legally allowable to support Guyana’s 2024 budget.



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