Another two major oil discoveries have been made off the shore of Guyana, all but assuring the impoverished South American nation an immense flow of wealth.
ExxonMobil announced two big oil discoveries in a region approximately 120 miles off the shore of Georgetown, the capital city of Guyana. The finds were made at the Tilapia-1 and Haimara-1 wells in what is known as the Stabroek Block — a region that is now considered one of the most prolific offshore oil potentials on the continent.
“We expect this area to progress to a major development hub providing substantial value to Guyana, our partners and ExxonMobil,” the president of ExxonMobil Exploration Company, Steve Greenlee, said in a prepared statement Wednesday.
Developers in the Stabroek Block keep uncovering more oil. ExxonMobil, along with U.S.-based partner Hess Corporation, revealed in July 2018 that there was more oil in the region than previously anticipated, announcing an estimate of 4 billion barrels — one of the largest oil discoveries in the past decade.
However, the recent finds at the Tilapia-1 and Haimara-1 wells bring the total number of discoveries in Stabroek block to 12, resulting in a whopping estimate of over 5 billion oil-equivalent barrels of recoverable oil. The Stabroek Block can now potentially hold at least five floating, production storage and offloading vessels, according to Exxon, and churn out over 750,000 barrels of oil a day by 2025.
Development in the region will begin quickly. The “Liza Phase 1” is advancing on schedule and expected to start producing up to 120,000 barrels of oil per day by 2020, with “Liza Phase 2” anticipated to begin halfway through 2022.
The oil discoveries are poised to transform the tiny country of Guyana.
With a population around 780,000 and one of the poorest countries in South America, Guyana is expected to benefit immensely from the dramatic uptick in production off its shores. In fact, experts predict the impoverished nation is poised to become of the wealthiest countries in the world and the next petro-state.
“This continues to be positive news for the people of the Co-operative Republic of Guyana, but the real substance of these finds will come when all Guyanese are able to benefit from these discoveries, whether directly and/or indirectly,” stated Mark Bynoe, the director of Guyana’s Energy Department.
If, for example, oil sells at $60 a barrel with Exxon and Guyana splitting profits at roughly 50-50, the South American nation would take in well over $5 billion in annual revenue. If production reaches 1 million barrels a day, Guyana would be raking in somewhere around $10 billion a year.
However, there are concerns that Guyana is wholly unprepared for the rush of money soon to come its way. The former British colony has recently suffered from political turmoil. The country’s parliament ousted President David Granger’s government in December in a vote of no confidence.
“There is no way the explosion of money will be managed properly,” Amy Myers Jaffe, director of energy security at the Council on Foreign Relations, explained according to Axios. “Here you take this poverty-stricken country and make them Qatar in three years.”
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