Guyana Has Become a Major Driver of Global Oil Supply Growth

Guyana has turned into a significant contributor to global crude oil supply growth in just a few short years.This is according to data published by the U.S. Energy Information Administration this week that showed Guyana had the third-fastest production growth rate globally, after the United States and Brazil.Between 2019, when oil production began in the tiny South American country, and 2023, output grew at an average annual rate of 98,000 barrels daily, taking the total from zero to 645,000 barrels daily last year.

All of Guyana’s oil currently comes from the Stabroek Block, which is operated by a consortium of Exxon, Hess Corp., and China’s CNOOC. Since the start of their operations there, the three have made 30 discoveries, tapping over 11 billion barrels in reserves. Production from the Stabroek Block is seen by Exxon reaching 1 million barrels daily in 2027.

Guyana’s government eyes oil production of some 1.64 million bpd by 2030 as it is eager to monetize its hydrocarbon resources before peak demand hits, as predicted by forecasters seeing a successful energy transition away from oil and gas. If the peak demand forecasts fail to materialize, Guyana will remain a major producer if its plans pan out.

These plans may come to include Chevron if its takeover deal with Hess Corp. gets done. Right now, this is doubtful because Exxon and CNOOC are challenging it—because of the Guyana operations.

Exxon was the first to oppose the deal, saying it had the right of first refusal to Hess Corp’s Guyana assets. Chevron and Hess have countered that this would have been the case were Chevron buying only those assets but since it was buying the whole company such stipulations were irrelevant. Exxon doubled down, however, and got the third consortium member on its side.

The debate highlights the significance of Guyana as a destination for Big Oil investments—Chevron has admitted it is the jewel in Hess’s crown that it actually wants with the takeover proposal.