Could current events in the oil and gas sector in the hemisphere portend a radical change in the pecking order insofar as oil production is concerned? That, at least, is what is being vaguely suggested in a story published by the online oil and gas information service, OilNow.
Published earlier this week, the OilNow report suggests, perhaps prematurely, that current developments in the oil and gas sector could be leading to a likely shift in the production pecking order in the region.
This week’s OilNow report follows an earlier assessment of the state of Venezuela’s oil and gas industry proffered by the United Kingdom-based global industry information provider IHS Markit drawing attention to a disastrous decline in Venezuela’s oil production. While IHS Markit says in its study that Venezuela’s oil production is currently hovering between 100,000 and 200,000 barrels a day, and falling – a decline from what, just two years ago, was around two million barrels – international oil analysts are increasingly talking up the ExxonMobil-driven prospects for Guyana’s oil industry barely five years after the country’s first major oil find.
IHS’ recent decidedly gloomy picture of Venezuela’s oil industry, going forward, notes that the fortunes of what is by far the country’s major money-earner continues to plummet under pressure from US sanctions.
The August OilNow story notes that by contrast, neighbouring Guyana which, just a handful of years ago had been benefitting from oil supplied by Venezuela under the hemispheric PetroCaribe deal, now appears to be headed for a 120,000 barrel per day “in the coming weeks,” from ExxonMobil’s Liza Phase 1 Development at the Stabroek Block, one of around fifteen significant oil finds made by the company, offshore Guyana, over the past five years. “The newest South American oil producing nation (Guyana) is projected to be generating more than 1 million barrels of oil per day by the end of the decade, catapulting it to among the top 5 Latin American producers,” the OilNow story says.
The fortunes of Guyana’s oil and gas industry still depend on several variables including just how shrewdly the industry is managed by a country with zero experience and not without its divisive political challenges as reflected in the aftermath of the country’s general elections held in March this year. Some analysts of Guyana’s politics regard the country’s recently acquired oil and gas industry as the coveted prize that animates the country’s opposing political forces.
Another not insignificant issue in this equation is that the seeming contrasting directions in which the two countries’ oil industries are headed coincide with a period when the longstanding territorial controversy is currently engaging the attention of the International Court of Justice (ICJ) and when Guyana is one of several countries in the hemisphere hosting Venezuelan citizens seeking refuge from the prevailing economic circumstances in the country.
While several countries in the hemisphere including Brazil, which shares land borders with both Guyana and Venezuela, have bowed to pressure from Washington to distance themselves from the Maduro administration in Caracas, Guyana, mindful of what, frequently, have been sudden outbreaks of tension with Venezuela, has distanced itself from Washington’s ongoing political quarrel with Caracas.
