Editor's note: This article appears in the special OTC edition of the E&P newsletter. Subscribe here.
All eyes are on the Guyana-Suriname Basin. It continues to produce jaw-dropping, truly staggering statistics. Most notably, Guyana and Suriname will be, combined, the third largest oil producer in Latin America and the Caribbean by 2040, responsible for just shy of 15% of total oil production, equivalent to about 1.5 MMbbl/d.
Exxon Mobil, along with its partners Hess and CNOOC, sit atop massive estimated recoverable reserves of more than 9 Bboe in the prolific 6.6 million acre Stabroek Block, located 120 miles (190 km) offshore Guyana in 5,000 ft to 6,200 ft (1,500 m to 1,900 m) of water. The Liza Destiny FPSO has been producing 120,000 bbl/d since late 2019 (four years after the Liza-1 discovery). Liza Unity (early 2022) and Liza Prosperity (2024) will boost production by a combined 440,000 bbl/d.
Exxon Mobil has indicated it could install as many as 10 FPSOs on the Stabroek Block. Capping these forecasted volumes are breakeven prices of between $25 and $35 per barrel, emphasizing the quality of the reservoirs, the light crude and use of established deepwater production technology.
But the head-spinning numbers don’t stop there. Suriname is playing catch-up in neighboring Block 58 and Block 52. In January 2021, TotalEnergies and partner Apache announced their fourth discovery in Block 58, lying adjacent to Stabroek, confirming the extension of this prolific oil play.
Not far away, Exxon Mobil and partner Petronas made a discovery in Suriname’s Block 52 in December 2020. Analysts estimate upward of 1.9 Bbbl recoverable reserves from these two blocks alone, with production reaching 650,000 bbl/d by decade’s end.
The future looks bright for Guyana and Suriname, but numbers alone do not secure success. Equitable regulation, good governance and business-forward internal investment are also critical.
Suriname has an established, albeit small E&P industry and the Staatsolie reputable national oil company, and it has created attractive legislation and a favorable regulatory environment to promote activity and engage major international E&P companies.
This includes offering 30-year production-sharing contracts, royalties of 6.2% and state (Staatsolie) license participation of only 20%. In this regard, Guyana, with no prior oil history and a smaller, less developed economy, is trailing its neighbor. Nonetheless, Guyana is stepping up with clear aspirations and plans to steer a governance path for civic society, industry and investment to ensure the new oil wealth serves the long-term future for the Guyanese people.
The specter of the resource curse haunts the industry, perhaps now more than ever as long-term endeavors to reliably serve global energy markets are weighed against decarbonization and the energy transition.
The harsh reality is that existing proven oil and gas basins, including Guyana and Suriname, will not meet future demand, despite the forecasted aggressive growth in clean, renewable energies. Multiple future discoveries and developments equivalent in size to the Guyana-Suriname Basin will be needed.
Moreover, economic development comes at a cost. However light the steps, the impact on the environment is real as populations lift themselves out of poverty. The industry must find solutions that both enable economic development and protect the planet.
So, what do we do? The industry is recognized for its innovation and technical prowess. Beyond our license to operate, it is up to us to act as a responsible partner and consider safety, local content, greenhouse-gas emissions, environmental impact and biodiversity. This way we ensure our presence supports the capacity building and infrastructure transformation needed to establish renewable, clean energy that will meet net-zero commitments for the long term. In other words, we need to be a force for good and an agent of change.
At OTC: Nils Kaageson-Loe, technology leader of drilling and completion fluids with Baker Hughes, will moderate the Wednesday “Around the World Session: The Guyana-Suriname Basin: Exploration, Production and Transition.”
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