Guyana has been named as one of three countries whose oil exports in the immediate future could impact last week’s agreed production cuts by member countries of the Organization of Petroleum Exporting Countries (OPEC) and Russia by an additional 500,000 barrels per day in order to seek to support global oil prices.
The mention of Guyana in terms of its soon-to-be status as an oil-exporting country comes in the wake of the disclosure by ExxonMobil several weeks ago that its ‘first oil’ time frame for Guyana had been brought forward from March last year to December 2019.
The December 6 Associated Press report names Guyana, Norway and Canada as three non-OPEC-member countries whose oil production and supply volumes in the period ahead “could make up for any cuts from OPEC and Russia.”
Coming after what, reportedly, was a period of protracted discussion at OPEC’s Vienna conference in Austria last week, the group’s aim, OPEC says, is to act collectively to support global price levels. The sticking point at the deliberations was, reportedly, the importance of countries performing a balancing act between keeping global oil prices stable and having to lose global market share to the United States, a country which is not part of the deal to reduce oil production.
A report seen by Stabroek Business credits Russian Energy Minister Alexander Novak as saying that the agreement to cut oil production by 500,000 barrels a day extends through the first quarter of next year.
The keenness to keep oil prices stable is reflected in the fact that last week’s agreement comes on top of a reduction of 1.2 million barrels a day that the countries that are part of the recent deal have been observing for the past three years.
As is customary in deliberations of this nature, the sticking point at the Vienna talks last week centred around how to share the production cuts among the fourteen OPEC member countries and nations like Russia, whose oil production strategies have been largely tied to those of OPEC in recent years. That, however, has not averted periodic disputes over burden-sharing as far as production cuts are concerned.
Saudi Arabia has reportedly been bearing the lion’s share of the burden in terms of production cuts recently whilst other countries, countries including Iraq and Russia, have been producing more than their expected amounts under the agreement. Oil prices had risen in recent days based on expectations of a production cut.
Meanwhile, whether or not OPEC’s immediate-term hand in exerting control over global oil prices is strengthened or otherwise, could be determined by Guyana’s neighbour, Brazil’s choice as to whether or not it becomes a member of the still powerful cartel. The country’s President Jair Bolsonaro has gone on record recently as saying that he was keen for his country to join OPEC. Brazil is currently ranked among the top ten oil-producing countries in the world.
With the appearance of oil harvested in Guyana waters now seemingly imminent, a recent report in the National, a leading Middle Eastern English-language news service, describes Guyana as, perhaps prematurely, the “next big beast” in the global oil industry.
