Guyana looks set to soon join the ranks of oil producing nations. ExxonMobil has announced that its highly anticipated Liza-2 appraisal well has confirmed the discovery of a world-class, highquality oil reservoir offshore Guyana. 

According to ExxonMobil, the potential recoverable resource is in the range of 800 million to 1.4 billion oil-equivalent barrels. Within the oil industry, anything over 500 million barrels of recoverable resources is considered a giant field. The well is the second on the 6.6 million acre Stabroek block and was drilled to 17,963 feet. This find builds on the success of their 2015 Liza-1 wildcat exploration well. 

Dr Krishna Persad, one of Trinidad and Tobago’s most respected geologists, explains that the recent find helps confirm the theory that the northern flank of South America is a mirror of the highly prospective Tano basin offshore Ghana and holds significant further potential for oil and gas discoveries. According to Dr Persad, the geological setting for the reservoir is an aulacogen (a geological feature) known as the Takutu Graben. 

With prospective oil production of over 200,000 barrels per day from the field, the find looks likely to transform the fortunes of Guyana, the second poorest country in the Caribbean region (after Haiti). The potential volumes of oil production in Guyana are comparable to the peak of oil production in Trinidad and Tobago in the early 1980s, though Guyana has a population of approximately one quarter of their Caribbean neighbour. 

While the composition of the petroleum find is yet to be announced, Dr Persad explains that an oil reservoir of this size could produce an additional 300 million standard cubic feet per day (mscf/d) of natural gas. If brought ashore, this natural gas production could be fed into electricity generation to help spur additional industrial development in Guyana, which until now has mainly relied on expensive, imported diesel for electricity generation. There are significant quantities of mineral resources available in Guyana that require cheap and reliable energy to be transformed into higher value products, for example, silica sands for glass or photovoltaic cell manufacturing. Alternatively, there are various floating options that can be utilised to monetise the gas offshore. 

ExxonMobil subsidiary, Esso Exploration, along with Production Guyana Limited, is operator of the massive Stabroek block and holds a 45% interest in the asset. Hess Guyana Exploration Limited holds 30% interest and CNOOC Nexen Petroleum Guyana Limited holds 25% interest. 

ExxonMobil’s exploration success will certainly spur on interest in Guyana amongst other international oil and gas companies, including companies such as Repsol, Tullow and Anadarko, which already hold offshore acreage in the country. The find may also revive interest in the neighbouring offshore Suriname acreage, where a number of exploration wells have been drilled over the years, without any major success to date. 

The lack of infrastructure in Guyana – particularly when it comes to port facilities – means that support for the ExxonMobil drilling programme has been staged out of Trinidad. Trinidad-based service companies are likely to continue to provide many of the services needed by the new petroleum industry in Guyana in the short to medium term. 

The Energy Chamber of Trinidad and Tobago has been working with Minister Raphael Trotman and his staff in the Ministry of Natural Resources to bring a trade and investment mission to Guyana during their annual Mining Week, scheduled to take place at the end of August 2016. There is significant excitement about the potential of Guyana in the Trinidad services sector, and about the wider growth potential that may be created by the anticipated significant increases in government finances, once oil production becomes a reality.