Guyana set to become a top oil producer with new major discovery

Energy - Himanshu Gill - Jan 14,2017

Rating -

stars - based on 21 reviews

guyana set to become a top oil producer with new major discovery

ExxonMobil revealed that it has found high-quality, oil-bearing sandstone reservoirs offshore Guyana, containing around 100 to 150 million barrels of oil.

With this discovery, Guyana, the tiny English-speaking country in South America, is set to become the next big oil producer in the Western Hemisphere. It is now poised to attract the attention and investment of some of the biggest oil companies in the world.

One of the oil reservoirs has been discovered at the Stabroek block, which is off the border region that is claimed by Venezuela in a territorial controversy with Guyana dating back more than a century, even though the area functions in practice as Guyanese territory.

The Payara field discovery is about 16 km northwest of Exxon's 1.4-billion barrel oil discovery in Liza. The whole digging project is led by Exxon, accompanied by Hess Corp and a unit of CNOOC Ltd is also holding stakes.

With a population of less than a million people, Guyana, Venezuela’s eastern neighbor on South America’s north coast, would be able to export almost all of the oil that it will start extracting, probably by the end of this decade.

The company’s announcements came only a few days after the Guyanese government revealed its plans to build a $500 million petroleum processing and service center on the Crab Island, an enormous investment considering that Guyana is one of the poorest countries in the region.

Early estimates by experts suggest that with more digging, over four million barrels of recoverable oil can be discovered in the region, which at today’s prices would be worth more than $200 billion. But the country, which currently produces only little energy for domestic use, urgently needs pipelines and other supportive infrastructure to begin a major production and export effort.