International energy research firm Wood Mackenzie released another report last month, building on their previous analysis of Guyana’s contract and oil potential. The new report, titled “Guyana – the richest corner of South America?” emphasized the sheer magnitude of the discoveries in the Stabroek and their global importance.

The report and a subsequent podcast interview with Senior Corporate Research Analyst Ruaraidh Montgomery explained that the Stabroek finds by the ExxonMobil-led consortium account for 15 percent of all global discoveries of conventional oil since 2015 by volume.
That’s an incredible amount for the Guyana basin, which was universally regarded as a high-risk frontier area just a few years ago and has still yielded few significant finds outside the prolific Stabroek block.

Wells off the coast of Suriname drilled by independent oil companies Kosmos, Apache, and Tullow have all come up dry but the consortium drilling in the Stabroek has seen success on more than 80 percent of its exploratory wells.

Wood Mackenzie’s report also addressed the latest Hammerhead discovery, the consortium’s ninth to date, as evidence that the recoverable reserves are likely to be “well in excess of 4 billion barrels.” Montgomery called Exxon’s success in the Stabroek block “phenomenal.”

He also highlighted particularly promising technical aspects of the project like the successful finds in different “plays” or types of geological formations. So far Exxon and its partners have found commercial quantities of recoverable oil in Cretaceous sandstone (Liza), Cretaceous carbonate (Ranger), and now in Miocene sandstone (Hammerhead). These vary based on the age of the rock strata, the location in the geologic timeline, and the type of rock and formation where the oil is found.

Montgomery stated that it “might be some time before we stop seeing this run of good news,” especially considering the additional Exxon drillship that will be on site and exploring new prospects in the Stabroek by the end of the year.

He also hailed the Guyana basin and the wider South American equatorial margin—an area stretching from Guyana to Northern Brazil that sits directly across the Atlantic from the prolific oil fields of West Africa—as one of the industry’s bright spots. “[There’s] enormous interest from the biggest players in the industry. [It’s] one of the most active areas globally in terms of exploration in the near to medium term.”

That interest from companies is partial due to “plenty of running room in terms of exploration and attractive fiscal terms on the block that reflect its status at the time of the award and that was as a frontier exploration area with very high risk,” Montgomery said.
All this goes to emphasize the incredible route that Guyana has taken, progressing rapidly from frontier status to burgeoning investment opportunity to a clear position as one of the energy world’s most promising new areas.

With first oil production set for 2020 and rapid increases forecast after that, this underscores the need for implementing smart and transparent revenue management policies and building regulatory and accounting capacity as soon as possible, including the Sovereign Wealth Fund. In this way, Guyana can take full advantage of the coming windfall that will truly transform this country. The podcast is available for free on Wood Mackenzie’s SoundCloud page for people curious to know more about Guyana’s prospects.