GUYANA – With the cost to produce oil in Guyana being among the cheapest in the world, ExxonMobil Guyana Limited EMGL and its Stabroek Block partners are guaranteed to make a profit, even if oil prices drop by half. ExxonMobil Guyana is the operator of the Stabroek Block with a 45% interest, while Hess Guyana Exploration Ltd. holds 30% interest and China National Offshore Oil Corporation CNOOC Petroleum Guyana Limited holds 25% interest.

Guyana has emerged as one of the fastest growing economies in the world, owed to the oil production offshore. Bloomberg’s Kevin Crowley in a recent article stated that Guyana has become the bedrock of Exxon’s post-Covid corporate revival. It was stated too, The Stabroek Block costs less than US$35 a barrel to produce, making it one of the most profitable outside of OPEC. With crude currently trading at US$85 a barrel, the oil field would make money even if the transition from fossil fuels caused demand to collapse and prices dropped by half.

Kaieteur News had reported that the cost to produce a barrel of oil in Guyana is among the lowest, said the International Energy Forum IEF and S&P Commodity Insights in a June 2024 report. The report titled, “Upstream Oil and Gas Investment Outlook” sheds light on the changing dynamics of global oil production costs, with particular emphasis on Guyana’s position as a cost-effective producer in the industry.

According to the findings of the report, the cost of oil production worldwide has experienced an increase. The report highlights that the majority of new oil supplies can be extracted at an average cost of US$60 per barrel Brent or less. Among the regions identified for their competitive production costs are Guyana, the Middle East, and West Africa. The report reveals that the Middle East boasts the lowest average breakeven price at approximately US$30 per barrel Brent, followed closely by Guyana with a breakeven price of US$36 per barrel Brent. Last month, this publication reported that according to Phillip Rietema, Vice President and Business Service Manager at EMGL, the company’s Guyana projects compete internationally and are some of the bests in the world.

Exxon is currently producing over 600,000 barrels per day bpd from just three projects in the Stabroek Block Liza Phase 1, Liza Phase 2 and Payara. Currently, the block’s partners plan for the combined production capacity to reach approximately 1.3 million b/d by the end of 2027, with plans to develop three additional projects: Yellowtail, Uaru, and Whiptail.  (Kaieteur News) …[+]