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Guyana's largest single oil find so far

Bert Wilkinson | 1/11/2018, 1:35 p.m.
Guyana’s government on the weekend hailed the latest offshore oil and gas find as the largest to date and suggested ...

Guyana’s government on the weekend hailed the latest offshore oil and gas find as the largest to date and suggested that life in that country, which hosts the 15-nation Caribbean trade bloc’s secretariat, will certainly see a major transformation after the first barrel is pumped from the seabed in the first quarter of 2020.

Commenting on last week’s announcement from U.S. oil giant ExxonMobil about its six major offshore finds, the government appeared to be preparing the country in a statement for a massive change of fortunes, a spike in per capita income levels and a move up from a low middle-income country rating to one in the upper-middle category. The latest successful well is located approximately 180 miles off Guyana. Authorities have already established a citizenship ministry to cater to an anticipated influx of people cashing in on the oil boom in the coming years.

“This will spur a major change of fortunes in the country,” Finance Minister Winston Jordan said, noting that the country for the first four years will earn approximately $350 million per year, while Exxon and partners Hess Oil and Nexen of China are allowed to recover their investment from the sector. Thereafter, the government has said, the country will earn much larger amounts monthly once the consortium recovers its investment and moves to what experts call profit oil.

Jordan said that authorities are particularly keen on improving the infrastructure, pegging the construction of major highways to link the heavily populated coast with the sparsely occupied forested interior as one project that could start immediately once oil and cash begin to flow.

Approximately 90 percent of the population of approximately 750,000 lives on or near the coast. He also said that money from the country’s new oil and gas sector will help to complete the 350-mile jungle highway linking Guyana and Brazil in a few years. Britain is also providing grant aid for this project, long discussed by governments on both sides for decades. The road could open access for Brazil to the Caribbean and vice versa.

“Certainly some of the capital towns in the interior, which we recently identified, can be upgraded to cities almost immediately,” Jordan said. “We are keen on the one at Lethem on the border with Brazil in particular. It has good potential to be transformed into a city from a town.”

Exxon is the first company to find offshore oil in commercial quantities, proving that decades old predictions by the U.S. Geological Survey that the Guyana-Suriname Basin was among the largest untapped areas were correct.

Exxon’s announcement said that its Ranger 1 well in the Stabroek Block had contained “more than 230 feet of high-quality oil-bearing reservoir. This represents the sixth discovery in Guyana since 2015,” the company said, referencing its first successful well that was discovered in May 2015.

Natural Resources Minister Raphael Trotman said in a statement, “This is a most historic discovery for Guyana. It will allow for immense transformational development of our nation in the coming years. Despite much naysaying and attacks against this process, I am confident that Guyana is on the right path. The news of an additional find of this magnitude, particularly at the start of the new year, can be seen as a further blessing and underscores the richness and diversity of Guyana’s natural resources. Managed prudently, these resources will allow for an enormous transformational effect on the lives of every Guyanese in the years ahead.”

The Exxon announcement has led to a mad scramble by other global oil and gas players to either begin exploring in the bloc or to request concessions near Exxon’s. These companies include Repsol of Spain, Tullow Oil of Britain, Chevron of the U.S., Total of France and a slew of others. Authorities are also rushing to send dozens of young professionals to petroleum training schools overseas as Guyana prepares for 2020.