Last week’s column concluded my rather lengthy revisit of the Buxton, BP proposal. This task started on Sunday, September 26 and took thirteen columns, which is much longer than I had originally planned. Therefore, except for very brief references to this topic in the future, I do not anticipate having to revisit this topic in any substantial way. Starting today, I propose to introduce analytical and theoretical works of more or less academic orientation that, in my opinion, could help the general public to understand the complex events that have unfolded so far, while Guyana’s oil industry is advancing rapidly.
More specifically, my task can be formally expressed as research: to advance a hypothesis or formulation that provides a general explanation or reasoned construction that correctly expresses the directing or governing dynamic that best captures the clearly unprecedented historical emergence of world-class Guyana. oil discoveries/discoveries beginning with the announcement of ExxonMobil in May 2015 and expected to last comfortably through the end of Guyana’s oil and gas sector’s first decade of production [2025/26]. Despite start-up setbacks, a consensus regularly emerges, backed by findings, that on its current trajectory, Guyana’s daily rate of crude oil production, DROP, will reach around one million barrels of oil equivalent per day. ; i.e. 1 million boe/d.
The tasks I have set myself will be addressed in four sections as outlined in the following and are built around four Analytical Pillars (AD). These are: A) the formulation of a general explanation for the unprecedented and explosive growth of Guyana’s skimming curve for oil discoveries/discoveries in the period from first discovery [mid- 2015] with the first oil from Guyana [December 2019]; (B) setting out the essential or controlling term of ExxonMobil, which is currently and continues to be the prime contractor, prime contractor and prime operator, located primarily, but not exclusively, in the Stabroek Block throughout the period of my analysis—that is, the first full decade of Guyana’s oil and gas sector [mid-2015] at [2025/26]; and pillars C and D mainly focus on the actions that I advise the authorities to take. Thus, C refers to the recommendations that I have repeatedly made regarding the Natural Resources Fund, NRF; my proposal to create a national oil company, NOC; advice on whether or not to join OPEC; local content requirements, LCR; and finally, Buxton’s proposal which I have revisited over the past 13 weeks. Similarly, D refers to improving revenue capture, governance, and public outreach, in the face of relentless noise and nonsense in local social and print media,
For convenience, Appendix 1 below captures the diagram described above and from which the analysis will derive in the future.
LEGEND: NOC = National Oil Company; LCR = local content requirements; BP=Buxton Proposal; NRF = National Resources Fund.
Pillar 1, which I begin to address in today’s column, offers a general thesis that explains the essence of the recent world-class offshore oil discoveries in Guyana. The data reveals that to date, all recoverable finds have been located in the Stabroek block, and of immense significance, all are under the operational control of ExxonMobil and its partners; the main contractor and the operator. As I had already observed in this series of Sunday columns, two more joint venture (JV) groups have been recognized as being on the verge of production. However, I think their reported data creates considerable uncertainty in this regard.
Already half a decade ago, in 2016, when discoveries reported by ExxonMobil and its partners were less than a billion barrels of oil equivalent, BoE, I predicted that Guyana’s discoveries would eventually reach 13 to 15 billion BoE. In truth, this prediction was based on a combination of 1) gut feelings and intuition, and 2) two lines of reasoning that stemmed from my research into the Guyana Oil Studies, in 2015. The first of the two lines of reasoning is the “Principle mirror image of the Atlantic; and the second reasoning is taken from two United States Geological Survey (USGS) fact sheets, which were published in 2000 and 2012.
World-class oil discoveries
ExxonMobil announced 27 discoveries and continues to suggest that its total recoverable resources are over 10 billion boe. Currently, my assessment of Guyana’s oil reserve potential is still between 13 and 15 billion boe and between 23 and 43 billion cubic feet of natural gas and natural gas liquids. I readily admit that is a lofty prediction. By way of comparison, Wikipedia’s ranking of countries with proven oil reserves ranks Brazil 15th (with a holding of 13.0 billion boe); Algeria is 16th (12.2 billion boe); and Angola and Ecuador 17th and 18th (with 8.3 billion boe). These data are revealed in the table below.
My estimate is supported by two arguments. First, an appreciation of Guyana’s petroleum geological principle of “the mirror image of the Atlantic.” Second, the estimates provided by the USGS.
Next week, I continue to document in minimal detail the hard data on Guyana’s world-class discoveries and from which I developed my analysis based on the twin constructions of chance and the zombie character of ExxonMobil, who is the main contractor and operator.