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Have Guyana’s Oil Prospects Been Hit By the Pandemic?

Some plans and actions by the administration of Guyanese President Irfaan Ali, who took office in August, should reduce some investor uncertainty, Jennapher Lunde Seefeldt writes below. // File Photo: Guyanese Government.

Estimated resources at Guyana’s offshore Stabroek block are now nine billion barrels of oil equivalent (boe), up from more than eight billion boe forecast earlier this year, Hess Corp., one of the companies developing the block, said last month. What is the current state of oil production in Guyana, nearly a year after it began? How have low oil prices and increased uncertainty this year affected the South American nation’s prospects for oil development? Is the government of President Irfaan Ali, who took office in August, implementing the right policies to both attract investment and effectively manage oil revenue?

Jennapher Lunde Seefeldt, assistant professor at Augustana University: “Guyana’s current production is less than what was expected, due to Covid-19 and an oil price bust. Additionally, ExxonMobil’s expenditures were reduced, and the Stabroek block’s production faced technical problems. Nevertheless, the company refocused its efforts in Guyana and began drilling in an adjacent block. Ali’s inauguration helped stabilize the political situation. Ali’s early moves as president should be attractive to investors. In November, Ali reflected on his first 100 days in office, remarking on the utilization of the emergency budget to launch critical infrastructure developments. This will facilitate and support the growth of local content investment with contracted majors. While Ali said he will not pursue changes to the original Stabroek contract, he is expected to take a firmer stance on future contracts. As more oil is found, Guyana’s position to negotiate…”

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About the Energy Advisor

A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewables, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere and beyond. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.


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Erik Brand

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