Guyana, currently imports about 12,800 barrel per day of refined products mainly from Trinidad and Tobago and the United States. However, the country is expected to become an oil exporting nation through production from the offshore fields located in the Stabroek block which are to come online starting 2020.
Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil subsidiary, has made several successful deepwater discoveries in the Stabroek block since May 2015 and forecasts initial production from the Liza Phase 1 to average 18,000 barrels per day (bd) of oil when it starts in 2020.
The Stabroek block development is a rewarding project for EEPGL due to the very competitive fiscal regime granted by Guyana and the high-yield discoveries. EEPGL was granted a 50% Production Share Agreement (PSA) contract with 2% royalty and 30% corporate income tax liability, paid from the state’s share of profit petroleum.
Fiscal terms for the Stabroek block have been successful in promoting oil exploration and attracted companies with considerable available investment capital and expertise to develop frontier areas. As for Guyana, this project will significantly contribute to government revenue. It is estimated that the initial fiscal take to the state could reach over US$400 million per year by 2022.
Image: Liza Oil Production Profile and Government Fiscal Take Credit: Upstream Analytics, GlobalData Oil and Gas.
The Guyana-Suriname Basin is estimated by the US Geological Service to have a prospective resource of more than 13 billion boe. It is still an under explored area and several experienced oil operators such as ExxonMobil, Hess, Kosmos Energy, Repsol, Tullow Oil and Anadarko, have acquired blocks in Guyana or neighboring Suriname.
Future oil findings in deepwater Guyana or even Suriname will further increase the attractiveness of this basin and with eventual new projects, it could become a key offshore producing area in South America second only to Brazil’s established pre-salt reservoirs.