Guyana, the tiny English-speaking South American country, is poised to become the next big oil producer in the Western Hemisphere, attracting the attention and investment dollars of some of the biggest oil companies in the world.
This week, Exxon Mobil and Hess announced the successful drilling of a deepwater exploration well that may soon confirm that the seafloor beneath Guyana’s coastal waters contains one of the richest oil and natural gas discoveries in decades. Experts now estimate that one of its offshore fields alone, known as Liza, could contain 1.4 billion barrels of oil mixed with natural gas, comparable to some of the larger fields drilled in South America.
With a population of fewer than one million people, Guyana — Venezuela’s eastern neighbor on the continent’s north coast — would be able to export nearly all of the oil that it will begin producing, probably starting around 2020.
The company announcements came only days after the Guyanese government announced its intention to build a $500 million petroleum processing and service center on Crab Island, an enormous investment for one of the poorest countries in the region.
Early rough estimates by experts of how much recoverable oil Guyana could have range to more than four billion barrels, which at today’s prices would be worth more than $200 billion. But the country, which currently produces precious little energy, sorely needs pipelines and other support infrastructure to begin a major production and export effort.
“It’s not often that a country goes from 0 to 60 so fast like this,” said Matt Blomerth, head of Latin American Upstream Research for Wood Mackenzie, a consultancy firm. Industry excitement over Guyana was stirred by a widely distributed report on Friday by the firm that said, “Guyana is rapidly joining the ranks of serious oil and gas players.”
The discovery is one more indication that South America is becoming a critical supplier to world oil markets. Brazil and Colombia are already major producers, and Argentina took a big step in the same direction on Tuesday when Chevron and several other international oil companies pledged to invest at least $5 billion this year and billions more in the years to come in the shale field in Patagonia known as Vaca Muerta, or Dead Cow.
Follow our Blog for updates, and Visit us at: