Abstract

Rapid development of the deep-water Guyana-Suriname basin, commencing with an initial discovery in 2015, has been fascinating to watch. Since that first discovery, following a string of 45 dry holes, there has now been a string of now 32 discoveries, with 7 discoveries in the first seven months of 2022. Cumulative crude oil reserves, virtually all light and sweet, is now at 11+ billion barrels. The first 2 production vessels, Lisa Phases I and II, out of a planned 10 FPSOs, have been designed, built, and installed. A third, Payara, is in construction and ahead of schedule. It is expected to be online by the end of 2022 with three additional units expected online by 2026.

Production is now at 360,000 bbl./day with another 250,000 bbl./day coming onstream in 2023. A fourth unit, Yellowtail, will be onstream by 2025. The initial four units will collectively produce 800,000+ barrels per day by 2025. Two more units will then join the fleet increasing production to 1.2 million barrels per day by 2027. This production is all from fields within the Stabroek concession. Analysts are predicting that production from Guyana, will exceed US Gulf of Mexico production sometime between 2030-2035.

Uncertainty about the tipping point vis a vis the US Gulf is not a result of estimating new developments in Guyana, but rather, from accurately estimating decline rates for the US Gulf of Mexico, a mature basin containing significant reserves, but plagued by higher costs and dysfunctional government regulation. The US Gulf has historically produced approximately 2 million barrels per day. Current production is averaging approximately 1.8 mm barrels per day. Recent discoveries and developments in the Gulf are simply not keeping up with government antipathy or the inexorable decline curve.

Beyond production results, Guyana is also beginning to reap the economic rewards associated with the new production. This includes a $1.3 billion gas-to-energy project that includes the installation of a 12” high pressure natural gas pipeline, from the deep-water Lisa fields to shore, which will provide 3,500 barrels per day of LPG as well as 50 mmscf/day of dry natural gas to operate up to 300 MW of new power generation, effectively doubling the country’s effective electrical output while halving the unit cost of power to the country’s rate payers. The Exxon group is managing the pipeline construction, but the line will be financed using the country’s new oil receipts currently resident in Guyana’s sovereign wealth fund. The government will also finance power plant enhancements as well as the new onshore natural gas liquids (NGL) extraction unit.

Finally, we highlight new discoveries in Suriname’s adjacent block 58 which lies directly to the south of Guyana’s Stabroek block. While still in the early discovery phase, with 5 discoveries but no commercial offshore production, this neighboring portion of the basin has significant long-term development potential. Guyana, Suriname, and Brazil, all utilizing standardized FPSOs and subsea field development, are the core of expected growth in crude oil production for both South America and for the Americas region. (August 2022)

This paper will be part of the OGEL Special Issue on "Offshore Energy Investments and Activities". More information here www.ogel.org/news.asp?key=710