Is Guyana About To Become A Major Oil Producer?

The government of Guyana says the US-based energy giant, ExxonMobil, will soon start offshore oil and gas exploration and production in an offshore area.

Fuel Fix: Exxon, Hess make big oil discovery off Guyana coast

HOUSTON – U.S. oil companies Exxon Mobil and Hess have confirmed the largest oil discovery in two years off the coast of Guyana, in a field that could cost as much as $18 billion to develop.

The deep-water Liza field, more than 100 miles from the small South American country, could hold as much as 1.4 billion barrels of oil equivalent, making it one of a handful of billion-barrel discoveries in the last half-decade. Exxon first found oil in the Liza field in 2015, when it drilled its first well there, but a second well found the potential for twice as much crude, the company said Thursday.

It’s a big score for an industry that has made sharp cutbacks in oil exploration and last year found less energy than any year since 1952.

“It is getting harder and harder to make large oil finds,” said Leta Smith, a director at consultancy IHS. “One of the things that has been troublesome over the past several years is each year we see fewer discovered volumes, since 2012. A lot of the big finds have been gas, rather than oil.”

The industry has only made five discoveries with more than 500 million barrels or larger in the past four years. In 2014, a discovery in Iraq had 1.6 billion barrels.

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Update #1: With Second Big Oil Discovery, Exxon Puts Guyana On The Map (Forbes)
Update #2: Exxon’s Guyana Discovery May Be Twice as Large as Thought (Bloomberg)

WNU Editor: I have some good friends in Guyana .... they gave me a heads-up on these developments earlier this year. The drawback from this discovery is that it is going to cause problems with Venezuela who are claiming that much of the territory of Guyana belongs to them .... Will Guyana's Border Dispute With Venezuela Lead To War? (July 26, 2015). More here .... Venezuela-Guyana Tensions Flare Over Oil Find In Disputed Waters (June 9, 2015).

Update #3: This is interesting .... and worrisome for those who have made a big bet on Venezuela's oil industry .... Venezuela's Oil Reserves Are Probably Vastly Overstated (Forbes).