Archive for the ‘Guyana’ Category

The offshore oil and gas (O&G) sector is set for the highest growth in a decade in the next two years, with $214 billion of new project investments lined up. Rystad Energy research shows that annual greenfield capital expenditure (capex) broke the $100 billion threshold in 2022 and will break it again in 2023 – the first breach for two straight years since 2012 and 2013.

Offshore activity is expected to account for 68% of all sanctioned conventional hydrocarbons in 2023 and 2024, up from 40% between 2015-2018.



  • Middle East investment continues to be strong
  • Good for South America thanks to Brazil (16 new FPSOs by the end of the decade) and the Guyana success story.
  • Strong forecast for Norway and the UK boosts Europe.
  • North America could do far better with less obstructive access policies.

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Good read.

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Only 3 years after first oil, Guyana’s offshore production has soared to nearly 400,000 BOPD, and that rate should triple by 2027. If you want to see the production details, Guyana is doing a good job posting their oil and gas production data.

The startup and compressor issues that contributed to high gas flaring volumes seem to have been resolved, and the recent flaring record is exceptional. Over the month of November 2022, the volume flared averaged less than 0.2% of the gas produced, better than the 1.0-1.5% flaring/venting rate for oil-well gas in US GoM from 2015-2021. Using the World Bank’s flaring intensity metric (m3/bbl), the current flaring intensity for Guyana is a remarkable ~0.07 m3 flared per bbl of oil produced.

The next step is to use the associated offshore gas to power Guyana. The two videos embedded below, while promotional, provide good information on plans to use natural gas for onshore power generation, new industry, and other beneficial purposes. This step will only use 50 million cu ft/day, leas than 1/8 the volume that is currently being reinjected. Increased use of the associated gas resource will be dependent on expanded pipeline and power generation capabilities, and LNG facilities to provide for gas exports.

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Exxon is now producing >360,000 bopd from just two Guyana FPSOs. So these two FPSOs are producing about 20% as much oil as the Gulf of Mexico or Norway. A third FPSO will add 220,000 bopd in 2023.

Guyana’s oil output is expected to increase significantly in 2023, as both projects maintain steadier production at capacity throughout the year, and as the third project, Payara, comes on stream in the second half of the year. Payara will add another 220,000 bpd of production capacity to Stabroek Block output, taking it to 580,000 bpd.

Oil Now

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100+ tcf and the discoveries keep coming. Here’s the latest:

London, 7 November 2022 – Energean plc is pleased to announce that i) the Zeus 01 exploration well has made a commercial gas discovery of 13 bcm ii) contingent resources at Athena have been upgraded following post-well analysis; and iii) the Stena IceMax drilling rig has moved to block 23 to drill the Hercules structure, the final well in Energean’s 2022 drilling campaign.

Will the gas/power transmission systems follow?

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Attorney General Anil Nandlall today said that Guyana is closer to securing a Council of Legal Education-recognised law school.

Stabroek Times

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Federal Oil & Bas Corp. (FOGCO)

Guyana’s pending decision regarding the formation of a national oil company brings back memories of unsuccessful attempts to do the same in the US in the 1970s.

The most serious attempt at forming a national oil company in the US was a 1975 Senate bill to establish the Federal Oil and Gas Corporation or FOGCO. (Oddly, the bill’s sponsors weren’t troubled by that acronym.) FOGCO was proposed at a time when natural gas supplies didn’t satisfy demand, and that was the primary impetus behind the legislation. (Supply issues went away when price controls were lifted.)

Concerns about a FOGCO then and now:

  • The political pressures under which a national oil company operates are not conducive to sound, expeditious decisionmaking. (Unfortunately, some current industry execs seem overly responsive to pressure from governments and activist organizations, which is not always in the best interest of the company and its shareholders).
  • Would limit competition and private investment.
  • Would delay or prevent innovation:
    • The shale revolution was driven by nimble private companies operating on private land in supportive states. Why is there Marcellus shale development in PA, WV, and OH, and none in NY? (Hint: It’s not the absence of resources.) Why could the US shale experience not be replicated in Europe?
    • Innovative deepwater development projects were driven by private companies and the supportive public policies of the 1990s.
  • A national oil company could be the first step in the process of nationalizing the petroleum industry.

Guyana is far different from the US and should do what is perceived to be in their best interest. Best wishes to the people of Guyana as they weight their options.

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U.S. Oil Industry Uses Ukraine Invasion to Push for More Drilling at Home

New York Times

Actually, it’s a case of the Ukraine invasion demonstrating the obvious – domestic production is critical to our economy and energy security. Europe and the US have had a wake-up call and responsible leaders now recognize the importance of secure supplies and the need to halt purchases from a tyrant.

The oil industry is doing just fine with $100+ per barrel oil. They will produce oil and gas where the opportunities present themselves: Guyana, Mexico, North Sea, Africa, Brazil, Canada, private lands in supportive US states, and elsewhere. The folly is US policy that unreasonably restricts exploration on Federal lands, including the Outer Continental Shelf. These restrictions penalize the owners of those lands, the people of the United States, not the oil industry and certainly not the Russian tyrant.

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According to ExxonMobil Guyana, the Liza Unity FPSO is the world’s first FPSO to be awarded for its sustainable design, documentation and operational procedures. The vessel has been awarded the SUSTAIN-1 notation by the American Bureau of Shipping (ABS), which is the Classification Society for the unit.

Guyana Chronicle
Liza Unity FPSO

Here are the criteria for the ABS Sustainability Notation, This looks like a solid program.

Based on the schematic for the sister FPSO Liza Destiny (below), gas that is not used to power the vessel will be reinjected.

The quality of offshore facilities and the attention to safety and environmental details have improved dramatically over time. The offshore industry deserves recognition for their efforts in that regard.

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IRVING, Texas – ExxonMobil increased its estimate of the discovered recoverable resource for the Stabroek Block offshore Guyana to approximately 10 billion oil-equivalent barrels


Where would you drill?

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