–as crude prices rise again

AS oil prices continue to rise globally, Guyana’s petroleum revenues will remain on an upward trajectory, with the country’s eighth oil lift positioned to rake in close to US$80 million.

More specifically, the price for brent crude was pegged at approximately $79.24 on Monday morning.
This could rise even further, but if oil prices remain the same when Guyana’s eighth oil consignment is lifted, then the country could stand to earn at least US$79,240,000, or G$16.5 billion from its latest sale, making it the most lucrative yet.

According to a Reuters article, the price for brent crude is now at its highest since October 2018 and gradually approaching $80 per barrel, having risen for “a fifth straight week last week.”

The article said, too, that, based on projections, brent crude could reach $90 per barrel by the end of the year, largely owing to the coronavirus pandemic. If this happens, Guyana’s year-end oil lifts could reach US$90 million, or G$18.8 billion.

It was only in August that Minister of Natural Resources, Vickram Bharrat, announced that Guyana had received payments for its seventh oil lift, to the tune of US$79,617,561.87, the largest single oil payment the country has received to date.

In a statement issued then, Bharrat said that the aforementioned payment was for 1,047,820 barrels of oil, which was extracted from the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel on July 3, 2021.

The seventh oil lift brought the country’s oil extractions to a grand total of 7,056,262 barrels, and earnings to US$436 million
Guyana sold its first one million barrels of crude on February 19, 2020, raking in nearly US$55 million. In its second million-barrel sale, the country received US$35 million, and another US$46 million as proceeds from the sale of its third million-barrel of crude, and US$49.3 million from its fourth oil lift.

In early March, Guyana also received US$61,090,968 (approximately G$13 billion) from the sale of the nation’s fifth oil lift. Further, it earned in excess of US$60 million from the sale of its sixth oil lift, and received US$13.9 million in royalties during the first quarter of this year.

It was reported, in May, that the country’s total revenue is expected to increase by 17 per cent, with earnings in the petroleum sector alone reaching well over US$500 million by the end of this year. With oil prices on a continuous rise, that figure could further skyrocket.

LARGEST EXPLORATION CAMPAIGN
Additionally, with ExxonMobil Guyana and its partners preparing to embark on its largest exploration campaign within the Guyana basin, Guyana’s oil finds could more than double by 2025.

According to a publication by OilNow, ExxonMobil, via its local affiliate Esso Exploration and Production Guyana Limited (EEPGL), has already submitted a document outlining its plans to the Environmental Protection Agency (EPA) for the expansion of drilling.

In the submission, the company said that Guyana’s oil reserves could more than double its confirmed nine billion plus barrels of oil equivalent, once drilling commences in the Stabroek and Canje blocks. These heightened exploration efforts are expected to run until December 2025, with the drilling of some 37 wells at the Stabroek block alone.

With regard to drilling capacity, Exxon said that it will continue use of its six drill ships, namely the Stena Carron, the Stena DrillMAX, the Noble Bob Douglas, the Noble Tom Madden, the Noble Don Taylor and the Noble Sam Croft, all of which continue to operate offshore Guyana.
As it is, those vessels have been executing a series of exploration, appraisal and development drilling campaigns with the Stena Carron being the only rig equipped to perform well tests.

OilNow related that while the proposed drill programme, outlined in the document submitted to the EPA, focuses heavily on the development of the Stabroek and Canje Blocks, there was no mention of Kaieteur block which has since seen a non-commercial discovery at Tanager.
In August, however, it was announced that the date for elective nomination of the second drill target on the Kaieteur block would be extended by seven months to March 22, 2022.

As it relates to drilling in the Corentyne block, CGX Energy has already commenced drilling for oil at its Kawa-1 well, presumably one of the “most exciting” exploration wells in the world, according to its operators.

The Kawa-1 well is located in the north-east quadrant of the Corentyne Block, approximately 200km offshore Georgetown.
The water depth is approximately 355 metres (1,174 ft), and the expected total depth of the Kawa-1 well is 6,575 metres (21,700 ft). It was reported recently that the estimated cost for the Kawa-1 project is close to US$85 million. The well is expected to reach total depth in the first half of December 2021.

Since 2015, Guyana has had 22 oil discoveries, and with the country poised to gain far more within the coming years, Minister Bharrat related that his government’s approach is to “bring benefits from the sector to our people.”

Meanwhile, speaking last month at the Offshore Technology Conference (OTC) hosted in the United States, Vice-President, Bharrat Jagdeo, had recognised that because of the climate change imperative to decarbonise the world, it was also important that Guyana pursues an aggressive mission of “getting as much oil out of the ground as quickly as possible.”

The former President reasoned that Guyana has to maximise the benefit from the industry and use those benefits to change lives of every Guyanese.

“We don’t know how swiftly we’ll get to a decarbonised world, but we have to make use of this period when there is still demand to get as much as possible out of the ground and that is why we support the rapid pace of the industry, but it must be done safely,” he related.
On a local radio programme called, “Guyana’s oil and you,” Jagdeo had said, pointedly, that even with the environmental concerns relating to oil production, Guyana does not have the option of leaving the oil in the ground.

To this end, he said: “There are many people saying now that we should not be producing oil. We don’t have that option in Guyana. Our people badly need development and we have to make sure that we produce the oil and get as much development out of it for our people to invest long term in other sectors so that they can get wealthier and have a decent life.”

The former Head of State, who has been globally recognised for his efforts to fight against climate change, indicated the government’s intention to rely on the advice of experts to ensure that its decision to continue oil production was sound.

“We can’t shut down the industry as some people have been calling for. We are going to be driven by the technical expertise. The oil and gas industry will be vital to our future and we have to do it well,” he said.

“We have made it clear that we are going to try, as far as possible, to ensure that Guyanese benefit from these resources,” he reiterated.
The Dr. Irfaan Ali-led government has repeatedly pledged to utilise Guyana’s petroleum earnings to transform and modernise a number of non-oil sectors; more importantly, agriculture.

The President has also said, on multiple occasions, that all measures are being put in place to ensure that Guyana does not fall prey to the dreaded ‘Dutch Disease,’ which has brought doom and gloom to many other countries that have been relying solely on their oil revenues.