CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2016
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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)
May 2016 ISSUE
Black Gold Found in Guyana: Promise of a better Future
Oil importation remains a ubiquitous burden on the production structure of Caribbean nations and is one of the most restraining factors in the manufacturing sector of these economies. With the current global consumption showing no signs of deceleration, governments in the Caribbean and worldwide had to seek ways to improve production designs so that economic growth and social development can be sustained.
Since its first oil find in the 1980’s, Guyana has embarked on numerous attempts over the years to find oil and despite several disappointing attempts the country continued until its offshore basin yielded a promise of a better future. Guyana yielded success in May 2015 when Exxon
To access CEIS website
Mobil Corporation announced a significant oil discovery on the Stabroek Block, located approximately 120 miles offshore Guyana.
Currently, the Liza Well seismic acquisition is underway and the data gathered is actively being analyzed to determine the full resource potential and the commercial viability of the discovered resource. There are also early studies underway for potential development options for the Liza field and plans to spud the well at its Liza discovery site within the next two years. In the oil and gas industry, the process of beginning to drill a well is referred to as “spudding in”. Initially, a surface hole is drilled which is lined with casing and
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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2016
Black Gold Found in Guyana: The Promise of a Better Future cement to protect groundwater. After the surface hole is expansion of supporting industries and the vast potencompleted, the main drill bit is inserted and the well is tial for job creation. drilled to the total depth. Firstly, the shift from consumer of oil to producer of Drilling for oil and gas is a highly complex task involv- oil will provide Guyana with large amounts of revenue ing sophisticated techniques and machinery. Drilling a which could be used to invest in the infrastructure and simple well can be very costly, in addition, the most ex- human development of the country. Guyana does not pensive wells are often found offshore, where high-end produce oil and relies heavily on imports to meet fuel drilling platforms are needed. In the case of Guyana, needs. If for example, investments were to be directed to the resource is located offshore and while benefits are improving machinery and production lines of the elecnot expected within the next five years, plans are be- tricity sector, as a consequence, electricity rates would ing explored to establish the necessary infrastructure go down exponentially. for production. For a country which produces no oil the discovery may hold oil and natural gas riches that In addition, since oil will no longer be an expense but a could have a significant impact on the business sector. major contributor to the revenue stream, this would also In this issue of the Petroleum Update we will look at expand international reserves and increase the wealth what this oil find means for Guyana and the potential of the country which increases global competitiveness. In addition, once the conditions are in place to accomimpact on its economy. modate investments oil can also mean that foreign inThe oil and gas sector is one of the most profitable indus- vestors could see Guyana as an attractive place to invest tries in the world but its success depends on the proper and even to produce. The country would no longer have management of several variables such as the implemen- to use cheap labour or overly generous tax incentives to tation of effective policies and legislation and identify- encourage investors to come. One potential area of ining the opportunities for the local industries. For any vestment could be that of the Bauxite and Manganese country, development is about transforming the lives industry. of people and not just transforming economies. In this manner, Guyana’s oil find has many transformative ef- Another area that will add to Guyana’s competitive stafects for a country where low productivity and high cost tus is the expansion or emergence of supporting indusstructures exist. Three transformative areas include (but tries in the oil and gas sector. Given the anticipated exnot limited to) infrastructural investments, spin-off or pansion of the economy it is imperative that the country
Starbroek Block
Starbroek Block off the coast of Guyana where ExxonMobil found oil reserves - www.stabroeknews.com
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tries to maximize on expanding these industries. Spinoff industries can include environmental management, laboratory and analytical support as well as a number of logistical and supply services such as transportation and construction that facilitate activities in the oil and gas sector.
of oil must also be considered.. The Dutch disease is one in which a sudden increase in income coming from natural resources could lead to a rise in the exchange rate. The appreciation in the exchange rate causes other export products to become uncompetitive, leading to a decline in their production. Additional pressure on domestic production comes from the spending effect Thirdly, the potential for job creation will expand tre- where cheaper imports compete with locally produced mendously, giving rise to new career fields and prospects products for the purchases of consumers. for residents. It will also open new fields of study for students that can contribute to the growth of the sector Guyana’s first record of striking oil was in the 1980s in or general business development in the region. Activi- the Takutu Basin. The Karanambo-1 well was drilled ties in the energy sector create indirect employment in by Home Oil Company which found small amounts of other sectors such as transportation, storage and com- light crude. Unfortunately, due to the geological charmunications for both upstream and downstream. acteristics of the reservoirs (fractured reservoirs) it was difficult to find commercially viable quantities of petroWhile the oil find in Guyana has the potential to signifi- leum in that area. cantly impact the economy in a positive manner, the issue of oil is by no means a simple matter. Going forward In hope of finding commercially viable deposits of oil, Guyana will seriously have to examine the potential ef- the government of Guyana in May 2013 signed confects of seismic surveys, drilling and extraction opera- tracts with international oil and gas companies, Exxon tions upon the natural environment and on other users being one of them, for exploration and production opof that environment. It must also take into account the erations offshore. This oil find has the potential to give effects on marine wildlife, on the livelihoods of the peo- Guyana (as it would with any other Caribbean country) ple who depend on marine life and those who dwell in the opportunity to generate revenues needed to invest the vicinity of on-shore oil-related operations. In addi- in education, health and infrastructure with an overall tion, the consequences of all potential environmental goal to alleviating poverty. Guyana is on the verge of hazards should be considered. realizing an opportunity of immense proportions. The vast reserves of hydrocarbons in the offshore basin repOther impacts such as the economic phenomenon - resent the promise of a better future for all Guyanese. Dutch disease which is related to the management risks
The Stabroek Block Field has been recognized by the US Geological Survey as the second largest area in the world with oil unexplored.
www.pulsamerica.co.uk
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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2016
PETROLEUM NEWS & HAPPENINGS JPS Wants Big Jump in Annual Tariff Adjustment [...]...Read more OUR to Monitor Pricing of LNG to Bogue Power Plant [...]...Read more Take Advantage of Low Oil Prices – Shaw [...]...Read more
Caribbean Energy
Jamaica Still Not Producing Ethanol 8 Years On [...]...Read more
Oil Speculators No Longer Confident In Price Crash [...]...Read more
PNP’s Increase in Gas Prices was not Inflationary, says Phillips[...]...Read more
Wasted Energy- JPS Says Streetlights That Burn All Day Are No Burden To Consumers[...]...Read more
Thousands in Suriname Protest Against Electricity Price Hike [...]...Read more
Oil On The Rise, US$50 Price Predicted [...]...Read more Shaw: Tax Hike Doesn’t Apply To JPS [...]... Read more
Oil Prices Fall Back After Breaching US$50 [...]...Read more
Shaw Increases Taxes on Gasoline, Cigarettes Effective Tomorrow [...]...Read more
JPS Profit Spikes on Lower Oil Bill [...]... Read more
Gas Prices Down $0.61, Diesel Down $0.06 [...]...Read more
Gas Prices Up $1.92, Diesel Up $1.71 [...]... Read more
GPL Set to Start Voltage Upgrades for Bartica This Week [...]...Read more
Grenada Power Company Puts Up Fight to Keep Licence [...]...Read more
Bogue Power Plant Ready to Use Natural Gas [...]...Read more
PetroCaribe Boost – Venezuela, Ja Agree To Strengthen Ties Through Oil-Purchasing Pact [...]...Read more
CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2016
Prices at the Pump MAY 2016
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Retail prices for Regular Unleaded Gasoline in the twelve Caribbean countries reviewed at the end of May 2016 showed increases in prices. Price increases were recorded in Bahamas,, Belize, Grenada, Guyana and Jamaica between 2.2% and 12.1%. The highest price increase was in Bahamas of 12.1% while Barbados recorded a decrease of 2.2%. Prices were stable in the remaining countries. The average retail price at the end of May 2016 was 2.61% higher when compared to the previous month.
Unleaded Gasoline: Regular : Average Retail Price – January - May 2016 (US$/Litre) COUNTRIES ANTIGUA/ BARBUDA BAHAMAS [91 OCT] BARBADOS BELIZE [87 OCT] DOMINICA GRENADA (95 OCT) GUYANA JAMAICA 87 Octane[E10] MONTSERRAT ST. LUCIA ST. VINCENT/ GRENADINES TRINIDAD/ TOBAGO [92 OCT] AVERAGE RETAIL PRICES
1.60
JAN 1.11 1.01 1.36 1.07 0.80 1.06 0.95 0.91 0.87 0.86 0.87 0.42 0.94
FEB 1.03 0.95 1.35 1.03 0.78 1.04 0.85 0.86 0.76 0.80 0.78 0.42 0.89
APR 1.03 0.94 1.39 1.16 0.76 1.05 0.85 0.91 0.92 0.82 0.78 0.42 0.91
MAY 1.03 1.05 1.36 1.23 0.76 1.10 0.88 0.98 0.92 0.82 0.78 0.42 0.94
5 Mths AVG 1.05 0.98 1.36 1.11 0.77 1.05 0.88 0.91 0.85 0.81 0.80 0.42 0.91
Comparative Retail Pump Prices Regular Unleaded Gasoline May 2016 vs. 5 Mths Avg (Jan-May 2016)
1.40
MAY
1.20 US$/Litre
MAR 1.03 0.97 1.32 1.09 0.74 1.01 0.85 0.88 0.76 0.78 0.78 0.42 0.88
5 Mths AVG
1.00
NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L *As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.
0.80 0.60 0.40 0.20 0.00
12 Caribbean Countries
See prices for all products at www.cippet.org
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CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2016
International OIL PRICES
CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : MAY 2016
60.00
US$/Bbl
50.00
Average Weekly and Monthly Crude Oil Prices March - May 2016 48.72
44.22
41.86
40.00 30.00
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39.18
34.43
20.00 10.00 0.00 Period WK1
Mar-16
WK3 Apr-16
WK4
MTH AVG
May-16
Average Monthly Crude Oil Prices 2013-2015 120.00
106.61
105.78
100.00 US$/Bbl
Analysis of International Crude Oil Prices from March to May 2016 period showed an average price of US$46.59/bbl . This average price was 24.6% higher than the price seen in March 2016 and 19% higher than the average price in April 2016. The highest weekly price seen in May 2016 for the commodity was US$48.72/ bbl-reflected in week four while week one accounted for the lowest price of US$44.22/ bbl. Overall, the lowest price recorded for the period was US$34.43 recorded in March 2016. The average price reported in May 2016 was 21% lower than the average price recorded in May 2015.
WK2
80.00 60.00
59.91
40.00 20.00
2013
2014
2015
0.00
Period
FEATURED OFFERS: P E TS TATS - t h e Ca r i b b e a n E n e rg y I n fo r m at i o n System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.
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