Introduction
Today’s column interrogates, rather summarily, the key crude oil metrics linked to Guyana, which within the space of four years, has been already hailed as the Americas’ fastest rising Petrostate. I begin this column with two preliminary observations. First, I concede upfront that, in spite of my desire expressed in the last column to locate Guyana’s petroleum resources and reserves discoveries in a precise setting, in actuality confusion and non-specificity prevail in all estimates I have come across thus far. I should add, including those from the Operator, ExxonMobil and partners, mainly on account of their datedness. Second, the high per person estimates of petroleum finds in Guyana can mislead due to Guyana’s small population
Because of the latter consideration I start this presentation with a quick look at the global level of petroleum holdings.
A quick global look
Recently, Rystad Energy in its 2023 global petroleum review explicitly recognized Guyana’s smallness, when compared to the global giants in terms of recoverable reserves holdings. The global total is estimated at more than 1.6 trillion barrels in that year, an increase of 52 billion on its 2022 estimate. Saudi Arabia is at the top of the 2023 list with more than 250 billion recoverable barrels of oil, followed by the United States, a distant second, at under 200 billion barrels of oil. Russia, Canada and Iraq – in that order, each have between 100 and 150 billion barrels of recoverable oil. Iran, China, the United Arab Emirates and Brazil have recoverable reserves each between 50 and 100 billion barrels of oil.
Guyana potential
Make no mistake about it though, Guyana is already an impressive oil and gas destination. ExxonMobil Operator/Contractor claims proven reserves of more than 11 billion oil-equivalent barrels, boe, in the Stabroek Block. Reportedly, Independent analysts [Americas Market Intelligence] have cited more than 20 billion boe to their prospective clients.
The government [owner] recently auctioned 14 blocks at the conclusion of its first offshore licensing round. The President advised prospective investors that 25 billion potential boe are at stake. Current block holders outside of Stabroek have reportedly done assessments of their license areas, with several billion more barrels estimated to be at stake. Rystad Energy claims that, if proven, this would place Guyana on par with Kuwait, which is listed in its ranking at number 10, with around 50 billion boe.
My own estimation
When ExxonMobil and partners announced its first discovery in May 2015, this was preceded by 45 unsuccessful wells drilled over five decades. From May 2015, to the end of the first year of oil exportation, 17 more discoveries were announced by 2020. By every metric this has been a phenomenal rate of discovery. Guyana’s creaming curve has been historically unprecedented. and located in the Stabroek block.
Way back in 2016, I had advanced the estimate that, Guyana’s petroleum resources potential far exceeded the original ExxonMobil then estimates of 600 million to 1.3 billion boe, announced soon after its 2015 discovery. Many urged then, and some still do so now that, my initial estimate of 13-15 billion boe by the early 2030s, was hopelessly optimistic. I indicated my estimate was founded on two lines of argument. First, an appreciation of Guyana’s petroleum geology, as expressed in the geological principle of the “Atlantic mirror image”, And second, estimates provided by the United States’ Geological Services (USGS).
Of important note, Guyana’s crude is low emissions, classed as “medium sweet”; with an API >35 and low Sulphur content of 0.5.
Reasoning 1, Mirror Image
I first reasoned that, geoscientists have posited Guyana’s crude reflect the earlier drifting apart of what was originally, a unified super-continent, combining South America and Africa. Over geological time a separation resulted in the Guianas Equatorial Margin (encompassing both offshore and onshore portions of Guyana, Suriname, French Guiana, as well as limited portions of Venezuela and Brazil). Consequently, the petroleum geology of the Guianas area closely resembles that of West Africa. It includes two sedimentary basins, namely, the Guyana-Suriname Basin and the Foz do Amazonas Basin. It is further reported that the Guianas Equatorial Margin/Guianas Basins is separated by the Demerara Plateau, which is a structurally high, thick succession of Jurassic and Lower Cretaceous carbonate-rich sediments.
This circumstance yields the thesis that, the petroleum system of the Guianas Basin is a “mirror-image” of West Africa’s petroleum system, where several large hydrocarbon accumulations have been found, including, the famed Jubilee discovery, offshore Ghana.
Reasoning2, USGS Assessment
My second justification is based on two USGS’ World Energy Assessments of Undiscovered Oil and Gas Resources in Central and South America as well as the Caribbean (2000 and 2012). The information provided there is “fully risked”, with estimates given, at levels of 95, 50, and 5 percent probability. The mean probability is also reported (where fractiles are additive, assuming perfect positive correlation). The estimates given for gas include all liquids. Undiscovered gas resources are the sum of non-associated and associated gas.
Conclusion
Next week’s column 1] wraps-up my presentation of the two reasonings indicated above and 2] reports on my updated estimate of Guyana’s potential crude oil holdings, before continuing with this revisit of the Buxton Proposal The topic to follow this, is Guyana’s estimated oil opportunity for crude oil exportation in light of the projected global climate transition.
