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Black gold transforming Guyana: Which oil companies are benefiting?

By Angela Barnes

14:44, 10 November 2022

Aerial view over Georgetown in Guyana
Investors watch developments in Guyana as oil majors flock to capitalise on the country's black gold – Photo: Getty

Guyana’s economy is set to grow 47% in 2022 on the back of oil exploration, according to the International Monetary Fund – with the government there forecasting output of around 825,000 barrels per day by 2025. 

Read on to find out which company is set to benefit the most from Guyana's black gold discoveries.

US crude oil (WTI) price chart 

The huge offshore oil deposits being found is putting the small South American country on track to become the world’s biggest per-capita crude producer.

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Oil companies set to profit from Guyana’s crude

Oil companies set to reap the rewards through discovering and developing in Guyana include Exxon Mobil (XOM), Chevron (CVX), Hess (HES), Phillips 66 (PSX), France’s TotalEnergies (TTEF) and Shell (RDSa). However, Exxon is leading the way.

Exxon Mobil (XOM) price chart 

Chevron (CVX) price chart

The extra crude supplies would certainly add support to the market as supply constraints resulting from industry underinvestment during the pandemic and Russia’s invasion of Ukraine have led to price volatility. 

Hess (HES) price chart

Phillips 66 (PSX) price chart

Oil companies investing billions

Global oil companies have spent billions of dollars in sustained investments, regardless of crude prices, Guyana’s Natural Resource Ministry spokesman told Capital.com in May.

TotalEnergies (TTEF) price chart

Shell (RDSa) price chart 

Exxon Mobil leading the way in Guyana

Exxon Mobil said it has made more than 30 discoveries since 2015, and noted it has ramped up offshore development and production at a pace that far exceeds the industry average.

“We are committed to responsibly and safely developing this world-class resource to help meet global demand for secure, reliable and lower-emission energy. Our investments through the pandemic have allowed us to increase supply at this critical time, while creating value for the people of Guyana, our partners and shareholders,” Liam Mallon, president of Exxon Mobil Upstream Company, said in a press release on 26 October.

Exxon further noted that its first two sanctioned offshore Guyana projects, Liza Phase 1 and Liza Phase 2, are producing an average of nearly 360,000 barrels of oil per day.

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A third project, Payara, is expected to start-up by the end of 2023, and a fourth project, Yellowtail, is expected to start-up in 2025.

The energy giant said it is currently pursuing environmental authorisation for a fifth project, Uaru – and by the end of the decade, expects Guyana’s oil production capacity to be more than one million barrels a day.

Exxon said its Guyana venture will help it reduce its carbon footprint and pledged to spend more than $15bn through 2027 to slash greenhouse gas emissions from company operations. 

“Some of that money will be spent in Guyana, where by 2027 our operations are expected to have about 30% lower greenhouse gas intensity than the average of our upstream portfolio. We’re looking at even more ways to reduce emissions in Guyana and in other operations around the world,” the group said.

Guyana’s premium black gold 

The crude being extracted from Guyana’s largest deposit, the Stabroek Block, is considered crude gold as it contains low carbon content, lower than 0.5%, and has a high American Petroleum Institute quality (above 30 degrees). 

One oil executive told Capital.com that some oil pumps from Latin America wells, such as Venezuela’s, will not require heavy refining due to its high Sulphur content, known as sour crude. 

“Guyana’s low refining cost oil is massively attractive for oil companies,” the executive said, adding refining quality crude is $3 to $4 per barrel, while heavy, sour crude can cost nearly double.

All of this comes as the world seeks to wean itself off planet-warming fossil fuels, as is currently being discussed at COP 27 in Egypt.

Markets in this article

CVX
Chevron
163.30 USD
1.87 +1.160%
XOM
Exxon Mobil Corp (Extended Hours)
119.66 USD
1.6 +1.360%
HES
Hess
156.78 USD
2.08 +1.350%
PSX
Phillips
137.99 USD
-2.56 -1.820%
SHELa
Shell - EUR
33.925 USD
0.43 +1.290%

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