Guyana Is Among Fastest Growing Non-OPEC Producers: US EIA

Guyana raised its crude oil production by an annual average of 98,000 barrels per day from 2020 to 2023, making the South American country the third fastest growing producer outside the Organization of the Petroleum Exporting Countries in the three-year period, the United States Energy Information Administration (EIA) reported Tuesday.

Guyana trailed only the U.S. in first place and Brazil in second, outpacing Norway in fourth and China in fifth. Since starting production 2019 Guyana’s output has surged to 645,000 bpd as of the first quarter of 2024, according to the EIA.

All of Guyana’s oil comes from the offshore Stabroek block, the EIA said. Stabroek holds discovered recoverable resources of over 11 barrels of oil equivalent and spans 6.6 million acres, according to information from Stabroek co-venturer Hess Corp.ExxonMobil operates the block with a 45 percent stake through Esso Exploration and Production Guyana Ltd., while Hess subsidiary Hess Guyana Exploration Ltd. holds a 30 percent interest. China National Offshore Oil Corp’s CNOOC Petroleum Guyana Ltd. holds the remaining 25 percent.

The partners recently made the final investment decision (FID) on a sixth development in Stabroek that is expected to raise the country’s oil production to 1.3 million bpd. ExxonMobil targets to put the $12.7 billion Whiptail project onstream 2027, according to the U.S. oil giant’s announcement of the FID April 12.“Production from the six Stabroek block developments will generate tens of billions of dollars of revenue and significant economic development for Guyana”, ExxonMobil said at the time. “Since first production in 2019, more than $4.2 billion has been paid into the Guyana Natural Resource Fund”.

Current production in Guyana is through three floating production, storage and offloading vessels: Liza Destiny, Liza Unity and Prosperity. A fourth, called Jaguar, is under construction to serve Whiptail.Stabroek has yielded over 30 discoveries, beginning with Liza in 2015. One discovery has been announced so far this year, the Bluefin well.However, the commercial future of Stabroek has become uncertain amid a court dispute that emanated from Hess’ pending acquisition by Chevron Corp.

ExxonMobil initiated arbitration proceedings March 6 before the International Chamber of Commerce tribunal asserting that a pre-emption right given to the three parties in the Stabroek joint operating agreement applies to Chevron’s acquisition of Hess. A pre-emption right or right of first refusal allows a partner to prevent a co-venturer from selling a stake to an outside party without first offering the stake to the partner.

Hess filed for arbitration March 11 with the opposite claim. China’s state-owned CNOOC followed suit March 15 with the same claim as ExxonMobil. The cases were confirmed in filings with the U.S. Securities and Exchange Commission (SEC).

In a simplification of the court process, Hess later told shareholders in a letter that the three Stabroek owners agreed to unify the arbitration cases into one. “On March 26, 2024, following a joint application by the parties, the authority administering the arbitration consolidated the three arbitration proceedings”, stated the letter, made public as an attachment to a SEC disclosure by Chevron April 24. 

Additionally, the EIA report noted that Guyana’s territorial row with Venezuela over the Essequibo region, which has reached the International Court of Justice, may affect operations in Stabroek and nearby offshore blocks.