After boosting oil production to above 500,000 barrels per day in five years, the world’s newest crude oil exporter, Guyana, looks to develop its significant natural gas resources, too.
ExxonMobil, whose consortium currently pumps all of Guyana’s crude oil, is positioning itself to explore and understand the natural gas reserves in the country this year. Guyana’s government and the U.S. supermajor are looking to nail down a timeline to develop some of the gas resources in the eastern part of the Exxon-operated Stabroek Block. The eastern part of the block is thought to have more gas content than the western part, where Exxon’s operating oil projects are located.
Guyana wants to advance its gas exploration and production industry sooner rather than later, considering the net-zero drive worldwide and the calls for moving away from fossil fuels.
Alongside oil producing projects, natural gas exploration and development is a key priority for both ExxonMobil and the government of Guyana, top company executives and government officials told Energy Intelligence in interviews last week.
“Between the exploration and appraisal activity, and then the concept work we’re doing, we’ll have a better feel for the timeline to develop the gas around the end of this year,” ExxonMobil Guyana president Alistair Routledge told Energy Intelligence.
Guyana’s Vice President Bharrat Jagdeo said, “The first priority now is to have that discussion with Exxon on the development,” volumes, and timeline of gas supply.
Due to the urgency of getting the natural gas to markets while gas demand is still growing, “We need them to share our view that these resources must be developed, and developed urgently, because of this timeline,” Jadgeo told Energy Intelligence, referring to Exxon.
Guyana has become a hotspot for oil exploration and development in recent years after Exxon found more than 11 billion barrels of oil equivalent offshore the South American country.
Exxon, leading a consortium with U.S. Hess Corporation, is currently producing all the crude oil in Guyana—the world’s newest oil-producing nation. Total oil production from the first three Stabroek block projects is currently more than 550,000 barrels per day (bpd) and is expected to reach more than 600,000 bpd later this year, Exxon says.
The latest Exxon project, Payara, as well as the Liza Phase 1 and Liza Phase 2 projects, are designed to eliminate routine flaring by using produced gas to power the floating, production, storage, and offloading (FPSO) vessel, and reinjecting the rest of the gas into the reservoir to improve oil recovery, the supermajor notes.
Exxon continues to find more oil on Stabroek and develops new projects, but it’s now also looking at the gassier part of the block to develop plans for natural gas production.
The company and the government of Guyana are already working on a Gas to Energy Project, whose start-up is expected by the end of 2024 and has the potential to significantly reduce the cost of electricity in Guyana, Exxon says.
Guyana’s government has drafted a so-called ‘Guyana Gas Monetization Strategy’ and invited earlier this month private companies to submit proposals on the design, construction, and operation of offshore gas gathering systems.
“To timely monetize and maximize the value of all of Guyana’s O&G resources, new gas monetization options and solutions need to be developed, including the participation of additional players in the O&G value chain besides the upstream project developers,” Guyana said in the draft gas plan.
“There are many benefits associated with natural gas and derived products, but time is of the essence due to market forces and uncertainties associated with the pace of the energy transition and ensuring that new O&G producers have a fair and just opportunity to develop their natural resources,” according to the government’s natural gas strategy.
“There is an immediate window of opportunity to monetize natural gas resources if Guyana seeks to monetize and maximize the value of its O&G resources,” says the government, which – like Exxon – is focusing this year not only on boosting oil production but also on advancing exploration and development plans for natural gas reserves.
By Tsvetana Paraskova for Oilprice.com