|
|
| Fig. 1: Location of Guyana Stabroek Block (red). [13] (Image Source: J. Lin, following Wikimedia Commons) |
On December 20, 2019, Guyanese President David Granger declared a new national holiday, the National Petroleum Day, to commemorate the production of first oil by ExxonMobil Exploration and Production Guyana Limited (EEPGL) in the Guyana Stabroek Block, located approximately 120 miles offshore from Guyana and covers more than 6.5 million acres of oil and gas exploration area. [1] The first significant off-shore oil find in Guyana however took place as early as May 2015 with the spud of the Liza-1 well. [2]
Guyana's oil production from the Stabroek block averaged 110,000 b/d in 2021, and is expected to increase to an average of 720,000 b/d in 2026. [3] Oil production volume in Guyana is still low compared to other countries in the region - for example, Brazil's average production is estimated at over 3 million b/d. [4]
However, by the end of 2022, Guyana has become ExxonMobil's most important overseas exploration area, as 15 of 22 large deepwater oil and gas fields overseas discovered by ExxonMobil were in Guyana, with recoverable reserves accounting for 58% of total reserves of ExxonMobils overseas large deepwater oil and gas fields. [5] Discoveries in Guyana have contributed significantly to the higher success rate of exploratory wells in offshore wildcats (49.3%) compared to onshore wildcats in 2021 (44.9%). [6] Recoverable reserves of newly discovered oil and gas fields in deepwater and ultra-deepwater fields, including discoveries in Guyana, made up the main body of global new reserves in 2021. [6]
The gross recoverable resource for the Stabroek Block was estimated to be nearly 11 billion oil equivalent barrels as of 2022. [3] There are many discrepancies between public domain data on proved oil reserves by country and commercial data on proved plus probable (2P) reserves data held by oil consultancies. [7] As such, it is challenging to rank Guyana by its oil reserves amongst oil- producing countries, although estimates have placed it amongst the top 20 countries in terms of proven oil reserves. [8]
The development of the Guyana Stabroek block was conducted in phases - Phase 1 started in 2019, Phase 2 in 2022, and Phase 3 is planned for commencement in the fourth quarter of 2023. Three more phrases have been planned for the next six years. Phase 1 includes a floating production, storage and offloading (FPSO) vessel, which is currently producing more than 120,000 b/d, with storage capacity of up to 1.6 million barrels. 4 drill centers with 17 wells were built in total. Phase 2 involves a second FPSO, with 6 drill centers and 30 wells. Phase 3 will involve a third FPSO, with 10 drill centers and 41 wells.
More than a quarter of oil and gas supply today is produced offshore. [9] According to the IEA, offshore oil production has remained steady at around 26-27 million b/d from 2008 to 2018. Discoveries in the Stabroek block will play a key role in boosting total oil supply from the region by 2028, with total capacity from the block expected to reach 1.2 million b/d. This expectation conforms with the broader industry trend of deepwater oil and gas projects driving increasing oil and gas production and reserves globally, since deepwater finds accounted for about 50% of the discovered conventional oil and gas volumes from 2008 to 2018. [9]
Guyana's oil discoveries also demonstrate increasing advancement in technologies employed by major oil companies to extend exploration and production activities to deep waters. For example, ExxonMobil's full wavefield inversion technology increased the drilling success rate in Stabroek block to 85%-89%, higher than the 30% in emerging plays. [5,10] Exxon is also installing its own fiber optic cable to support offshore operations on the FPSO in the second phase of the project to reduce operating expenditures, and improve surveillance and production optimization. [2]
Guyana achieved 43.5% real GDP growth in 2020, which was the highest in the world. [3] Real GDP growth was primarily driven by oil GDP, which was projected to grow more than 100% in 2022. Real non-oil GDP contracted by 7.3% in 2020 but has since rebounded, even though projected growth in the medium term averages 5% per year. However, given the volatility in global oil prices and the risk of being dependent on non-renewable resources for income, the IMF has advised Guyana to diversify its non-oil economy and improve educational and vocational training of the labor force. [3]
Offshore exploration and production activities are a major contributor to ocean pollution due to the risk of oil spills. In fact, shareholders of ExxonMobil submitted a resolution to the company in 2023 for a thorough assessment to be conducted of devastation that might be caused from an oil spill in Guyana, due to concerns that production in Guyana's Stabroek Block has peaked above the safety threshold at operational projects. [11]
A recent impact assessment conducted by Exxon showed that an unmitigated oil spill from Stabroek Block can reach Trinidad and Tobago, Aruba, Bonaire, and Curaao, Grenada, St. Vincent and the Grenadines, St. Lucia, Martinique, and Barbados as well as Dominican Republic, Haiti, and Jamaica, affecting more than $140 billion of economic activity in the Caribbean territories (for a map of proximity between Guyana and other Caribbean countries, see Fig. 1). [11] In June 2023, Exxon agreed to provide just $2 billion in guarantees to cover potential oil spills after being sued by Guyanese residents for breaching its insurance obligations. This is particularly concerning given that a spill of about one barrel of crude already happened at the Liza Two development site in September 2022. Environmental impacts of oil spill include mortality and degradation of mangroves, marine invertebrates, seabirds, marine mammals, and the composition and activity of microbial communities, with the extent of impacts dependent on the type and volume of oil spilled and the biota affected. [12]
© Joyce Lin. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] O. Karacali et al., "Pushing the Limits in Deep Water Data Acquisition for Accelerated Field Development: Industry Record Batch Well Testing," Offshore Technology Conference, Houston, Texas, One Petro OTC-32210-MS, 24 Apr 23.
[2] M. F. Ryan et al., "Guyana Operations and First Oil," Offshore Technology Conference, Virtual and Houston, One Petro OTC-30979-MS, 9 Aug 21.
[3] "Guyana: 2022 Article IV Consultation-Press Release, Staff Report, and Statement by the Executive Director for Guyana," International Monetary Fund, 2022.
[4] G. Michelett et al., "Onshore and Offshore EOR Applications in Brazil: A Review Study," SPE Annual Technical Conference and Exhibition, One Petro SPE-210009-MS, 26 Sep 22.
[5] X. Liu and L. Dou, "Practice and Enlightenment of Deepwater Petroleum Exploration of International Major Oil Companies: A Case Study of Guyana Stabroek Block," China Pet. Explor. 28, 78 (2023).
[6] L. Dou et al., "Analysis of the World Oil and Gas Exploration Situation in 2021," Pet. Explor. Dev. 49, 1195 (2012).
[7] J. Laherrère, C. A. S. Hall, and R. Bentley, "How Much Oil Remains for the World to Produce? Comparing Assessment Methods, and Separating Fact from Fiction," Curr. Res. Environ. Sustain. 4. 10174 (2022).
[8] L. McDonald and M. Üngör, "New Oil Discoveries in Guyana Since 2015: Resource Curse or Resource Blessing, Resources Policy 7474, 102363 (2021).
[9] "Offshore Energy Outlook," International Energy Agency, 2018.
[10] A. L. Varga et al., "Innovation and Integration: Exploration History, ExxonMobil, and the Guyana-Suriname Basin, Offshore Technology Conference 2021, One Petro OTC-30946-MS, 9 Aug 21.
[11] "Exxon Board Members Misled Shareholders into Believing Thorough Study on Oil Spill Devastation to 12 Caribbean Countries From Guyana Was Done," Kaieteur News, 31 Jul 23.
[12] B. Zhang et al., "Marine Oil Spills - Oil Pollution, Sources and Effects," in World Seas: An Environmental Evaluation, 2nd Ed., ed. by J.-F. Hamel (Academic Press, 2018).
[13] B. Wilkinson, "Dreams of Wealth, Fears of Problems as Guyanha Finds Oil," Seattle Times, 4 Sep 16.
