petroleum industry in Guyana

Historically, Guyana was a net importer of fuel.{{Cite web|last=Espinasa|first=Ramon|date=September 2008|title=Prospects for the Oil-Importing Countries of the Caribbean|url=https://core.ac.uk/download/pdf/6441576.pdf|access-date=2020-12-04|website=core.ac.uk|publisher=Inter-American Development Bank}} Guyana's offshore Guyana Basin and the inland Takatu Basin have attracted foreign companies such as Shell, Total and Mobil since the 1940s, who completed much geological surveyance of the area and drilled a number of wells.{{usurped|1=[https://archive.today/20120905080020/http://www.guyanaguide.com/petroleum.html www.guyanaguide.com]}} In the Takatu Basin, 3 wells were drilled between 1981 and 1993, however they were dry or not found to be commercially viable.{{Cite web|title=Traversing a Slippery Slope: Guyana's Oil Opportunity {{!}} Publications|url=https://publications.iadb.org/publications/english/document/Traversing-a-Slippery-Slope-Guyanas-Oil-Opportunity.pdf|access-date=2020-12-04|website=publications.iadb.org}}

Offshore oil exploration began in the 1950s, and 9 wells were drilled between 1965 and 1970, only one of which struck oil, Abary-1 well in the Kanuku  license area. In the late 1980s, Mobil, Total, Guyana Exploration and BHP continued exploration in the region.

In the mid-2000s, CGX Energy attempted to spud a well but the rig was deterred by Surinamese gunboats claiming they were in Surinamese waters. United Nations International Tribunal for the Law of the Sea (ITLOS) determined the exact borders in September 2007 but no further wells were drilled until 2012.

As of 2020, Guyana has nine petroleum blocks under active leases, of which six have had active exploration. The Petroleum Division of the Guyana Geology and Mines Commission has the responsibility of monitoring exploration in Guyana.

File:Guyana's offshore mineral exploration blocks, producing vessels, and proposed projects in the Stabroek block (May 2024) (53736542101).png

Esso, a subsidiary of ExxonMobil, began exploring the off-shore region in 2008.

As of March 2024, more than 30 discoveries of oil and gas have been made offshore Guyana.{{Cite web |title=ExxonMobil Guyana announces new discovery |url=https://corporate.exxonmobil.com/locations/guyana/news-releases/03152024_exxonmobil-guyana-announces-new-discovery |access-date=2024-07-07 |website=ExxonMobil |language=en}} As of May 2024, ExxonMobil estimated its discoveries totaled 11 billion barrels of oil equivalent.{{Cite web |last=OilNOW |date=2024-05-01 |title=Exxon’s 11-billion-barrel Guyana reserve estimate ‘hasn’t moved’ significantly - Country President {{!}} OilNOW |url=https://oilnow.gy/featured/exxons-11-billion-barrel-guyana-reserve-estimate-hasnt-moved-significantly-country-president/ |access-date=2024-07-07 |language=en-US}}

Predictions about the windfall of this significant oil discovery made a significant impact on the country, including the 2020 presidential elections.{{Cite web|date=2020-06-27|title=Huge oil discovery off Guyana raises the stakes in election fraud case|url=http://www.theguardian.com/world/2020/jun/27/huge-oil-discovery-off-guyana-raises-the-stakes-in-election-case|access-date=2020-12-04|website=the Guardian|language=en}} There is also the threat of the oil curse, which affects similar resource-rich countries.{{Cite news|date=2019-05-08|title=Will Guyana soon be the richest country in the world?|language=en-GB|work=BBC News|url=https://www.bbc.com/news/world-latin-america-48185246|access-date=2020-12-04}}

There are also concerns of large international companies getting an unfair share of ownership of oil royalties.{{Cite news|date=2020-03-02|title=Guyana votes amid high hopes over oil discoveries|language=en-GB|work=BBC News|url=https://www.bbc.com/news/world-latin-america-51544071|access-date=2020-12-04}}{{Cite web|date=2019-11-22|title=Hess' confirmation of payment of US$30 million raises serious red flags for Exxon|url=https://www.stabroeknews.com/2019/11/22/features/the-road-to-first-oil/hess-confirmation-of-payment-of-us30-million-raises-serious-red-flags-for-exxon/|access-date=2020-12-04|website=Stabroek News|language=en-US}}{{Cite web|date=2018-03-16|title=The 1999 and 2016 Petroleum Agreements Compared – Annexes|url=https://www.stabroeknews.com/2018/03/16/features/the-road-to-first-oil/every-man-woman-and-child-in-guyana-must-become-oil-minded-15/|access-date=2020-12-04|website=Stabroek News|language=en-US}} Natural-resources watchdog group, Global Witness, reported that Guyana may have lost as much as $55 billion in potential revenue from negotiations that favored Exxon. Exxon refuted the claim based on unaccounted for costs of the high risk involved in exploring the "frontier hydrocarbon province".{{Cite web|date=2020-02-03|title=Watchdog group says Guyana lost billions in Exxon oil deal|url=https://apnews.com/article/9e1dd752edb53c7fb50360e8bf6bd291|access-date=2020-12-19|website=AP NEWS}} Global Witness withdrew its report in January 2021, redirecting its efforts to focus on fighting climate change.{{Cite web |last=OilNOW |date=2021-01-11 |title=Global Witness withdraws report on Guyana, cites overestimation of potential economic benefits from oil production {{!}} OilNOW |url=https://oilnow.gy/featured/global-witness-withdraws-report-on-guyana-cites-overestimation-of-potential-economic-benefits-from-oil-production/ |access-date=2024-07-07 |language=en-US}}

Guyana announced new model petroleum contracts in 2022 to increase its share of revenue from oil production. The new contracts added a corporate tax and increased the royalty rate. However, the new terms do not apply to ExxonMobil's Stabroek Block, where all current crude oil production occurs. {{Cite web |last=OilNOW |date=2022-11-03 |title=Guyana hikes royalty to 10% in major overhaul of PSA fiscal terms {{!}} OilNOW |url=https://oilnow.gy/featured/breaking-news-guyana-hikes-royalty-to-10-in-major-overhaul-of-psa-fiscal-terms/ |access-date=2025-01-07 |language=en-US}}

The oil and gas exploration activity by Guyana created a new source of tension with neighboring Venezuela. The 2015 discovery set off a round of recriminations between Venezuela and its eastern border neighbor. Officials in Caracas, which has long had claims on Guyana's Essequibo region, have alleged that the concession is located in disputed waters.{{citation needed|date=June 2021}} This wasn't the first off-shore border dispute, as then-President Burnham had addressed the United Nations in 1968 over Venezuelan claims of area up to 12 miles from disputed territories. Prior to this, a border award was agreed upon in 1899 as the result of a case overseen by U.S. Chief Justice Melville Fuller, however in 1954 a memorandum by one of the lawyers was published posthumously, questioning the validity of the award as unfairly to the benefit of British Guiana.{{Cite news|last=Arfeld|first=George|date=1968-08-21|title=U.S. Caught In The Middle|work=Santa Cruz Sentinel|publisher=Associated Press|url=https://cdnc.ucr.edu/?a=d&d=SCS19680821.1.27&srpos=76&e=-------en--20--61--txt-txIN-guyana-------1|access-date=2020-12-19}}

In May 2015 ExxonMobil announced discovery of more than 90 metres of high-quality, oil-bearing sandstone reservoirs about 200 km off the coastline,{{Cite web |title=Guyana |url=http://corporate.exxonmobil.com/en/company/worldwide-operations/locations/guyana#About}} considered to be one of the largest crude oil discoveries of the past decade.{{Cite web |last=Szczesniak |first=Philip A. |date= |title=The Mineral Industry of Guyana, 2016 |url=https://prd-wret.s3.us-west-2.amazonaws.com/assets/palladium/production/atoms/files/myb3-2016-gy.pdf |access-date=2020-12-06 |website=USGS}} The Liza-1 well was drilled to 5,433 metres in 1,742 metres of water, and was the first well on the Stabroek block, which is 26,800 square kilometres or 6.6 million acres in size. Early estimates claimed the area contained 700 million barrels of oil (a total value of US$40 billion, international crude price at the time of discovery).

Liza Phase 1 project in the Stabroek block began producing crude 20 December 2019.{{Cite web |date=2019-12-21 |title=Historic draw of first oil arrives |url=https://www.stabroeknews.com/2019/12/21/news/guyana/historic-draw-of-first-oil-arrives/ |access-date=2020-12-04 |website=Stabroek News |language=en-US}} Two more projects began producing in February 2022{{Cite web |title=ExxonMobil starts production at Guyana's second offshore development |url=https://corporate.exxonmobil.com/news/news-releases/2022/0211_exxonmobil-starts-production-at-guyanas-second-offshore-development |access-date=2024-07-07 |website=ExxonMobil |language=en}} and November 2023.{{Cite web |title=Payara: Offshore Oil Development in Guyana |url=https://corporate.exxonmobil.com/news/news-releases/2023/1114_guyana-oil-payara-exxonmobil-offshore |access-date=2024-07-07 |website=ExxonMobil |language=en}}

Operated by ExxonMobil Guyana Limited (45%), with Hess Corporation (30%) and CNOOC (25%) as partners, the block holds an estimated 11.6 billion barrels of oil. As of 2024, crude from the Stabroek Block remains the top-selling oil in Hess Corporation’s global portfolio, averaging US$80.04 per barrel; surpassing production in the United States and Malaysia.{{Cite web |title=Guyana’s oil continues to shine as Hess’ top seller |url=https://www.surinametimes.com/artikel/guyanas-oil-continues-to-shine-as-hess-top-seller |access-date=2025-04-14 |website=www.surinametimes.com |language=en}}

Petroleum (Exploration and Production) Act 1986 (PEPA) detailed the State's main regulatory power in granting licenses for petroleum prospecting and production. It was repealed and replaced by the Petroleum Activities Act 2023, in an effort by government to modernize the management of the Petroleum sector.[https://oilnow.gy/featured/guyana-lawmakers-pass-landmark-petroleum-bill-in-marathon-session-of-parliament/]

Natural Resource Fund Act 2019 established a fund for government proceeds from petroleum operations, to be operated by the Bank of Guyana.{{Cite web|title=Natural Resource Fund {{!}} International Forum of Sovereign Wealth Funds|url=https://www.ifswf.org/members/natural-resource-fund|access-date=2020-12-05|website=www.ifswf.org}} A different administration overhauled the legislation with the Natural Resource Fund Act 2021, arguing it was necessary to ensure transparency and accountability.

The Local Content Act 2021 was also passed to require contractors to procure goods and services from Guyanese companies and nationals.{{Cite web |last=OilNOW |date=2021-12-30 |title=Guyana advances major oil and gas legislation as pandemonium breaks out in Parliament {{!}} OilNOW |url=https://oilnow.gy/featured/guyana-advances-major-oil-and-gas-legislation-as-pandemonium-breaks-out-in-parliament/ |access-date=2024-07-07 |language=en-US}} ExxonMobil and its partners increased spending on Guyanese suppliers by an annual average of 80% in the 2017-2023 period.

{{Reflist}}

• [https://www.ggmc.gov.gy/ Guyana Geology and Mines Commission]

{{Economy of Guyana}}{{Petroleum industry}}

Category:Economy of Guyana