LAST week, the announcement of two additional discoveries in the Stabroek Block increased Guyana’s proven reserves to 11.2 billion barrels of oil equivalent. Additionally, a new Rystad Energy report finds that Guyana accounts for 18 per cent of discovered resources and 32 per cent of discovered oil since 2015.
Guyana has emerged as a global leader in total offshore finds and one of the most competitive supply sources outside of core Middle East and offshore Norway production, beating out the Permian Basin, Russia, and many other offshore sources. In 2022 alone, Guyana’s GDP is expected to grow by almost 50 per cent, primarily driven by the oil sector.
An analysis of the offshore discoveries finds that 20 per cent of proven reserves are estimated to be associated gas, some 16 trillion cubic feet. If estimates hold, Guyana will have the third largest gas reserves in South America. This finding comes as the government seeks to finalise the gas-to-shore project, a signature achievement that would be a win for the country and the Guyanese people.
This joint project, funded by ExxonMobil Guyana, will deliver gas from the Liza field to an onshore gas-fired power plant to generate electricity and a Natural Gas Liquids (NGL) plant to cover Guyana’s domestic demand for other natural gas products. Additionally, Guyana’s electricity costs could be reduced significantly to one-fourth of what Guyanese pay now.
The gas-to-shore project would bolster Guyana’s commitment to sustainable oil and gas development by utilising associated gas for productive purposes. At a gas forum in May, President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker, expressed support for this project.
A joint venture of Dutch firm Van Oord and Luxemburg-based, Subsea 7, was selected to design, manage, and install the approximately 190-kilometre pipeline. This comes after President, Dr. Irfaan Ali, highlighted the government’s extraordinary measures to ensure transparency and value for money.
“There is absolutely nothing to hide in this process or project. It is above board, it is transparent, and it is open. It has undergone every test of scrutiny,” President Ali said at the recently held gas-to-shore forum.
President Ali urged the public to look beyond the pipeline to the transformational potential in other sectors.
“The benefit[s] of this project is not only about the cost of electricity… It is national and transformative in nature and cuts across sectors, and every stakeholder will benefit from it,” Dr. Ali said.
The pipeline will be able to move 130 to 140 million cubic feet per day of associated gas onshore to be processed. The gas used in power generation will support the transition to renewable energies, including hydropower and solar, and will remain a key source of reliable base load power for decades. As the gas sector matures, there is potential for Guyana to become a significant player in the lucrative global gas trade and secure both domestic supplies while supporting the energy needs of neighbours and allies.
Conflict in Europe over the last several months has sent world energy markets into uncertainty, and now gas supply to the European Union (EU) from Russia has dropped nearly two-thirds compared to last year.
The EU will benefit from Guyana’s increased production capacity in the next five-to-ten-years, as it seeks to move away from Russian oil and gas. In June, the EU Parliament voted to consider natural gas projects as “green” for investment, a signal that the commodity will be an essential part of the EU’s energy mix in the coming years, even as it seeks to move to renewables.
Rystad Energy’s report found the emissions intensity from Guyana’s offshore operations outperforms 75 per cent of global oil and gas producing assets, making it an even more lucrative investment location and a key piece for reducing global carbon emissions. Guyana can capitalise on its resources and reach climate targets by focusing on gas as a “transition” fuel.
General of the Americas at the EU, Brian Glynn, told reporters in July that “the more supply of gas there is in the world, the more choices people have about where they get that gas… We have discovered in the European Union that one of our principal gas suppliers of gas… is an unreliable partner, so we’re looking to other parts of the world for more reliable partners.” Guyana can be that reliable partner, and a recent article from energy analyst Arthur Deakin found that Guyana could replace Russian oil in Europe by up to 17 per cent in the years to come.
For Guyana, the gas-to-shore project is an investment in energy independence, lower electricity costs, and diversification away from imported fossil fuels. With continued investment in the sector and the necessary regulatory and transparency frameworks, Rystad estimates that Guyana will become a top five global offshore producer by 2035.