WASHINGTON - Almost 4,000 feet beneath the surface of the Atlantic Ocean, off the northern coastline of South America, Exxon Mobil is drilling one of the biggest oil discoveries of the last decade, the so-called Stabroek Block with an estimated 4 billion barrels of crude.
It stands to buoy the oil giant’s fortunes at a time the company’s oil and gas production is flagging. But the discovery has come at a price.
The massive find, located in the waters of the tiny country of Guyana, has reignited a century old territory dispute with its powerful and volatile neighbor Venezuela, flaming geopolitical tension in a region where the United States, China and Russia are increasingly competing for influence.
Exxon Mobil's Guyana discovery is the king of the company's portfolio. The company has discovered more than 6 billion barrels of oil here.
The discovery is so big that it involves geopolitical risk that is worth paying attention too.
Guyana, the small and sparsely populated nation on South America’s northern coast, ended 2019 with great economic news as a consortium of oil companies led by ExxonMobil announced the first commercial production of crude oil from the Liza Field in its Stabroek block on December 20th.
Guyana is soon to become the fastest growing economy in the Caribbean, with the International Monetary Fund (IMF) projecting that GDP will grow by nearly 90 percent next year. This growth will be largely driven by oil revenues as new production phases come online in the deep waters off the country’s eastern coast.
The Yannis P – a Marshall Islands registered crude oil tanker will soon lift the first one million barrels of crude from the Stabroek Block offshore Guyana.
Production in Guyana commenced on December 20, 2019, less than five years after the first ever commercial discovery in the South American country at the 6.6 million acres Stabroek Block.
ExxonMobil Guyana Public and Government Affairs Advisor, Janelle Persaud, in a comment to OilNOW, said, “The first tanker of crude oil from the Liza field will begin loading this weekend. As we have previously indicated, ExxonMobil will process the initial cargo in its own refining system.”
The Guyana government’s first lift is expected to be in February 2020. Shell has been selected to buy the country’s first three cargoes.
Despite projected growth in natural gas and renewable energy use to generate electricity through 2050, in the Annual Energy Outlook 2020 (AEO2020) Reference case, the U.S. Energy Information Administration (EIA) projects that coal and nuclear power plants will collectively provide more than 25% of generation through 2050.
Other scenarios with different assumptions for oil and natural gas supply—which in turn affect natural gas prices—have implications for long-term coal-fired and nuclear-powered electricity generation in the United States.