Guyana is recognized as a new player in the oil industry with the discovery of billions of barrels of oil by Exxon on the shores of this small South American country. With this oil wealth, gas has also been obtained, and there have been plans to add LNG to Guyana's export commodities. However, now the government of this country is examining whether to retain gas for the domestic market.
Oil Exports and Daily Production
Guyana's crude oil exports are ending the year at a high rate of over 1 million barrels per day. This country has reached this level of exports in just 10 years from a state of no oil production, due to the repeated discoveries by Exxon and its partners in the Stabroek Block, with estimated reserves of over 11 billion barrels. Production has rapidly increased, and Exxon and its partners have brought four floating production, storage, and offloading units to the Stabroek field. As a result of this rapid development, by September of this year, the wells in this field had produced a total of 1 billion barrels of oil.
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Challenges of Natural Gas and LNG Plans
Exxon, CNOOC, and its new partner, Chevron, continue to develop, with Exxon aiming to achieve a production capacity of 1.7 million barrels per day from eight offshore projects by 2030. However, this interferes with natural gas plans. Two years ago, the Guyanese government launched a tender for companies interested in developing its gas reserves. While it could have easily trusted the consortium led by Exxon again, officials in Georgetown at that time announced they wanted more diversity.
This tender ended strangely. Out of 17 companies that submitted proposals, the Guyanese government selected a company called Fulcrum LNG, which had been established just a year earlier by a former Exxon executive. This LNG development project was estimated to cost around $30 billion. However, since then, Guyana's LNG plans have not made much progress, one of the main reasons being the lack of natural gas for liquefaction.
Exxon requires about 2 billion cubic feet of natural gas daily to inject into the wells and stimulate production. Currently, gas production from Guyana is limited to associated gas from Exxon's fields in Stabroek. An Exxon spokesperson stated, "We are working with the government of Guyana on development plans that help maximize resource use and value for the country." Given these circumstances, the government of Guyana may have an option to retain gas produced from the Stabroek field for domestic consumption, including electricity generation and petrochemicals.
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