As one of the world’s most recent oil producing nation’s Guyana is quickly awakening from its slumber as it emerges as the world’s fastest growing economy.

On December 21 2019, Guyana produced “First Oil” and more importantly the first lift occurred on January 21, 2020. This week Trafigura managed the sale of the most recent lift of Guyana’s ultra low sulfur diesel to the world’s third largest consumer of crude: India.

Through this sale, Guyana continues to rapidly expand and grow it’s oil production, despite struggling with the growing pains of a startup nation. I would argue, that the challenges that the country has faced over the past 24 months pale in comparison to what lies ahead for a country that will quickly become the richest country per capita in South America, Central America, and the Caribbean.

Doubling Down

Drillship activity has nearly doubled over the past 2 years and proves that the IOC’s are looking to accelerate their investment plans despite the global slowdown in the Oil industry. The ultra-deepwater drillships Noble Bob Douglas, Noble Tom Madden, and Noble Don Taylor, which are currently drilling for ExxonMobil offshore Guyana as well as the Stena DrillMAX & Stena Carron are all on station and actively pursuing either production or exploration drilling programs. Exxon’s 2021 published drill program is set to add at least 1 more drillship - the Noble Sam Croft which is scheduled to arrive in April 2021.

Looking to capitalize on the unheard of success of 18 successful wells, Guyana’s production outlook is only going to continue to accelerate as it works to reach over 1 Million Barrels a day within the next 5 years.

To date the Country of Guyana has received $250 Million in revenue as a part of the production sharing agreement with ExxonMobil and their Partners HESS and CNOC Nexxen. Which included 4 oil lifts in 2020 totaling nearly 200 million USD despite challenges faced with Covid-19 as well as issues associated with the commissioning of the FPSO Liza Destiny.

In 2021 Guyana is scheduled to receive proceeds from 5 to 6 lifts depending upon production targets. The first lift for the year occurred on February 5th resulting in the highest revenue to date totaling over $61,090,968.03 as a result of stronger Global Oil Prices as the world begins to emerge from the Covid-19 pandemic.

It’s not all Sunshine and Roses

Despite things continuing to move forward rapidly, challenges have been faced, as a result of Covid-19 and global oil prices, two drill ships did face slowdowns last year pushing back drill campaigns.

On the exploration side, ExxonMobil failed to find commercial quantities of oil at the Bulletwood-1 offshore well in the Canje Block, offshore Guyana. But despite the minor setback, the Operator intends to continue its drilling program for the block and is already working on its next well the Jabillo-1 which is already operational and believes that Sapote-1 will quickly follow over the coming months.

A major malfunction with a gas compressor on the Liza Destiny has shown the Guyanese, that its not just a matter of finding the oil, but maintaining operations that are a critical factor in ensuring an oil field’s success. The Gas Compressor broke in early February and had to be shipped to Europe to be fixed. This resulted in increased flaring and some reduction in production as a result of the unit coming offline. Despite the unit being down, Guyanese got to see just how fast the oil industry moves with the unit breaking, being disassembled and shipped to Germany only to return by the middle of March and expected to be back online in April. In a country where it can still take up to a month to open a bank account, the Oil industry is setting the example as to how quickly problems can be fixed when millions of dollars are on the line.

With the 2021 Guyana Annual Budget being passed, and the oil industry continuing to exceed expectations, we believe that 2021 will be a banner year for both the Country and its IOC partners.