Understanding Energy: Guyana’s partnerships yielding results

THE past week marked the second annual International Energy Conference and Expo in Guyana, which was held from February 14 to 17 in Georgetown. With over 200 exhibitors from the global oil industry participating and over 800 delegates and sponsors, this was an event to highlight achievements, discuss the concerns affecting the energy sector and maximise the benefits of local content development in Guyana and the region.

This conference signifies the growing geopolitical and regional influence of Guyana, which can be attributed to its rapidly developing oil and gas sector. The growing industry in the country has been funding the development of its non-oil sectors and boosting the overall economy of the country. Just in the last year Guyana has made US$1.24 billion from oil revenues and royalties. More than 30 discoveries have been made offshore Guyana, with 10 new discoveries in 2022, thus leading the world in offshore discoveries since 2015. All of the projects are located in the Stabroek Block, which ExxonMobil is active participant in with a 45 per cent operating stake.

Vice President Bharrat Jagdeo clearly recognises the unleashed power of Guyana’s energy sector. At the conference, speaking to attendees, he said, “we want multiple numbers of investment groups coming in here because then you can start the exploration activities simultaneously.”

Early this month it was announced that the Payara project from ExxonMobil will be utilising a floating production, storage and offloading (FPSO) vessel, Prosperity, which will be the second FPSO to operate offshore Guyana with a unique sustainable design. The FPSO will have an initial production capacity of 220,000 barrels of oil per day and will be able to store two million barrels of crude oil. As Guyana balances a diversifying energy mix, it remains crucial that it continues to develop its oil and gas resources as the window to reap the benefits of production narrows.

Moreover, as Guyana’s oil and gas sector continues to develop, there will be a clear need for investments from partners like ExxonMobil, Hess Corp. and CNOOC, which have played an instrumental role in helping Guyana recognise its potential as a producer. By 2027, Guyana’s oil production is expected to reach 1.2 million barrels per day which would make it the second largest producer in South America, further cementing the country’s regional presence as a producer. At the international energy conference, Liam Mallon, ExxonMobil’s Upstream President, confirmed plans to ramp up production saying “[it’s] an exciting place to wake up in the morning and think about what’s possible. Where will we be in five years? What else can we do to innovate, to create, to drive, for Guyana and the world?”

From the Liza Phase 1 development to the fourth FPSO underway, Mallon and ExxonMobil are already thinking about what’s next for this small country as projects continue to come online and estimated production numbers continue to rise, “[we’re] also executing an extensive exploration and appraisal program in the area around the Fangtooth Discovery to define a potential 7th development, underpinned by the recent success of the Fangtooth-SE-1 well.”

Additionally, at the conference under the theme “Harnessing Energy for Development,” Suriname’s President Chandrikapersad Santokhi addressed the delegates, and during his speech urged closer collaboration with Guyana on developing the oil and energy sector. This is a clear signal that Guyana’s role as a leader in the region is pivotal to supporting other countries and offering lessons learned on the success it has achieved in such a short time. President Santokhi believes a collaboration between the two countries will offer opportunities to “share expertise and resources, save costs, reduce risk, improve our relation, and develop the border areas… to increase production and also promote greater transparency and accountability.”

Moreover, Mallon also referenced Guyana as a “superb example” of what partnership can do as he spoke to ExxonMobil’s longterm investment in Guyana and its relationship with the government. The partnership between Guyana and ExxonMobil has already yielded positive results and will continue to be highly valuable both for opportunities in the future, and the record achievements already being realised. As an emerging producer, Guyana has a lot of responsibility to prove it can continue to compete at a high level on the global stage. Already the country is on track to be the largest offshore oil producer in the world by 2035, according to a 2022 report by analysts at Norway-based Rystad Energy. Through continued investments and partnerships, the sky is the limit for the country. President Irfaan Ali on Guyana’s energy policy sums it up well, “[what] we have said is oil and gas is not the answer. It will give us much-needed revenue to catalyse the other sectors […] When we speak about development and transformation and the positioning of Guyana, it is not guesswork. It calls for big thinking.”