Introduction
Today’s column continues my presentation on Guidepost 6. As observed earlier, this Guidepost is crucial for my estimating Guyana’s anticipated petroleum revenues. It is a key metric for calculating the cost-price-profit profile of Guyana’s coming petroleum sector. Three of the observations, which were introduced last week, need to be reiterated at this juncture.
First, the cost-price-profit profile mentioned above is also the risk-reward profile for Guyana’s efforts to develop a petroleum sector. Second, the determination of the unit cost of production (or per barrel cost of oil and gas) is inextricably linked to the expected life cycles of the constructed wells, as these are represented in various petroleum projects. Third, it is immeasurably difficult to estimate the cost per barrel of oil and gas, with a high degree of accuracy, before any production and sale of crude oil and gas has actually commenced! It is for this particular reason, I had advised last week: “it is very difficult to fix this cost … in the absence of cooperation of the international oil companies (IOCs)” that are leading Guyana’s development of petroleum sector.