Guyana’s Stabroek block is often praised for the quantity of resources unlocked therein, totaling a jaw-dropping 11 billion barrels of oil equivalent. But the sheer size of the resource base is not the only factor of attraction for ExxonMobil and its partners, Hess and CNOOC.
According to Vice President and Business Services Manager at ExxonMobil Guyana, Phillip Rietema, the country has six sanctioned projects, all of which boast of low breakeven spreads, thereby making them some of the most competitive deep-water projects of this decade.
During his appearance on the Energy Perspectives Podcast, powered by the Guyana Energy Conference and Supply Chain Expo, Rietema noted that the cost of oil has fluctuated in the last three years, moving from US$100 per barrel to US$80 per barrel. Despite this, he assured that Guyana’s projects still hold a competitive edge.
“The projects here in Guyana, they compete internationally. They’re some of the best deepwater projects in the world. We’re very proud of them. I know our Chairman (Darren Woods) has said something to the effect of ‘we expect that the Guyana projects that we’re doing in Stabroek will go down as one of the greatest deep-water projects in industry’s history’,” said Rietema.
The ExxonMobil official said this bodes well for Guyana as it underpins the notion of a significant stream of revenues in the years to come. While ExxonMobil has received government approval for six projects, only three are currently in operation, producing over 640,000 barrels of oil per day. A fourth project, Yellowtail, will hit first oil next year, taking the national output to 890,000 barrels of oil per day.
“These projects can weather volatility…they all have costs of supply under US$40 a barrel,” said Rietema. Simply put, even if oil prices drop from US$1,000 to US$40 per barrel, Guyana’s deepwater projects will remain feasible.
At current prices, Guyana’s three oil projects are generating over US$1.5 billion a month, said Rietema. By the end of 2027, he said ExxonMobil and its partners will have a production capacity of over 1.3 million barrels a day from six ships. This would take annual revenues north of US$30 billion.
ExxonMobil’s operations now support the employment of over 6,000 Guyanese. The oil giant also has 1,700 unique Guyanese businesses as part of its supply chain. The ExxonMobil official was keen on noting the importance of Guyana in his company’s global portfolio.
“It’s a very special opportunity we have here in Guyana…this is truly a once in a lifetime opportunity to come. It’s really that combination of a world class asset, world class revenues…in this small population, that makes this so unique,” said Rietema.
He assured that the oil major and its partners are here for decades to come and are committed to operational excellence. Equally important, he said, is seeing Guyana succeed with its resources, becoming a model for others to follow on how to get it right with oil and gas. Taking current developments into consideration, he believes the country is on the right trajectory.
