Oil News — Guyana’s Crude Oil Exports Make It The World’s Fastest Growing Economy

The International Monetary Fund (IMF) and BMI (of Fitch Solutions) are jumping for joy over the economic growth of South America’s tiny country on the Caribbean Sea— Guyana.

According to their economic projections, Guyana’s GDP growth will surpass 100% in the next five years.

Andrew Trahan, BMI head of Latin America country risk, noted that Guyana is already on track to recieve the benefits from this economic growth in 2023. Here’s what he told CNBC reporters about these projections:

“Guyana’s robust growth has been, and will continue to be, driven by a rapid expansion of oil production following a series of discoveries in recent years. We see this strong growth continuing over the coming years as oil production keeps going up, with real GDP rising roughly 115% between 2022 and 2028.”

However, BMI’s analysis about Guyana’s stupendous economic growth also takes into account the country’s political stability during a volatile oil price risk scenario. Much of this optimism is clouded in a mystery of oil prices going forward, which, in the meantime, keeps the government in Guyana in a stable position. Lower oil prices could quickly change this outlook.

This uncertainty hasn’t deterred ExxonMobil from its pursuits there. According to a latest report by OilNOW ExxonMobil Guyana is already making plans to send eight more drillships to the country’s offshore areas by mid-2025 to boost crude oil production in the future. Read more about ExxonMobil’s crude oil production scenarios in Guyana below.

On 30 June 2023 Rig Zone provided an update on the latest offshore oil and gas discovery made by the joint-venture operations of Frontera Energy Corporation and CGX Energy.

Providing a full map of the latest discoveries in Guyana, Rig Zone illustrates that this is the second oil discovery made in the Corentyne block, located next to the Staborek block held by a consortium of producers such as ExxonMobil, Hess and CNOOC.

According to World Bank reports, Guyana is now becoming one of the fastest growing economies in the world due to the offshore oil discoveries. There’s a lot happening with offshore oil markets, especially those located in emerging markets such as South America and Sub-Saharan Africa.

Just look at how the world’s largest energy producers BP and ExxonMobil are going deeper into South America’s energy production investments.

An update provided by Upstream on 20 May 2023 describes oil and gas supermajor British Petroleum (BP) as “Trinidad & Tobago’s largest hydrocarbons producer…responsible for more than half of all the natural gas produced in the country.”

This update covers BP’s seven-well drilling programme, containing 16 offshore production platforms, that are being extracted out of mature shallow-water fields. Trinidad & Tobago is a notable natural gas producer in South America, including its presence in the market-share of natural gas used as a feedstock for nitrogen fertilizers.

Reporting on the same day by OilPrice.com highlights how Guyana is “the world’s hottest frontier drilling location.”

The offshore oil discoveries at offshore Guyana by ExxonMobil keep rolling in the dough for the company and the country. The reports asserts that oil exports from the Guyana offshore field could exceed 1.2 million barrels per day by 2027. If these figures are materialized, the country would become South America’s top oil producers and the 16th biggest oil producer globally.

Not only are the string of oil discoveries from Guyana’s Stabroek Block making an impact on the economy of Guyana and profits of ExxonMobil, but also leading to a surge in investments from oilfield service providers and other infrastructure projects, such as a much-needed deep-water port.

For British Petroleum (BP) the world is headed for a sustainable energy future that should be affordable and secure — known as the energy trilemma.

BP CEO Bernard Looney has been very vocal about the company’s enhanced view of the Energy Transition on the company’s future outlook on oil and gas investments.

These diverging and converging scenarios around Coal, LNG and clean energy technologies, will put into perspective for the oil and gas industry how the to successfully track the company’s progress on Environment, Social, Governance (ESG) frameworks. One way would be to look at how those investments in Energy Transition and Clean Energy Technologies are being spread out for domestic production versus other global energy production investments.

In the UK, Equinor’s plan to invest €1 bn to upgrade the gas infrastructure in its North Sea Field operations, for example, is seen as a lower risk for the European supermajors to explore and produce more oil and gas reserves that can be recovered for export markets. On the other hand, I offer that Shell’s “risk-adjusted returns” ethos will see the company exit many of the geopolitical flashpoint cases, especially in Southeast Asia, where competition with China in the energy sector is going to be fierce.

These are the high-low risk scenarios to consider going forward for energy production investments around the globe. If the world is headed toward a more sustainable energy future, then oil and gas supermajors are operating on the precipice of climate change action and shareholder values.

To know more about the energy security dilemmas in emerging markets, read an outlook published in Areas & Producers about the long-term effects from Geopolitical Trends, Domestic Corruption and Conflicts on the world’s biggest energy producers.

The content in Areas & Producers provides a methodology for readers and writers who are curious about global trends and the future of the world.