As a result of the crippling sanctions on its oil industry from the USA as well as the economic turmoil unleashed by the COVID-19 pandemic, Venezuela’s oil production has been dwindling. For June and July, the Spanish speaking nation only produced an average of 356,000 barrels of oil per day (bpd) and 388,000 bpd respectively. These figures pale in comparison to the production high Venezuela rode some 10 years ago when it was exporting about 2.4 million barrels of oil per day.
Considering the country’s unfortunate circumstances, Guyana which is a newcomer to the industry, already has in line, three projects that can see the nation surpassing Venezuela’s current production figures.
With respect to Liza Phase One, Guyana is expected to reach full capacity of 120,000 bpd this month. ExxonMobil has also indicated that Liza Phase Two will produce 220,000 bpd and is on track for operations in 2022. Once it receives the relevant approvals, ExxonMobil’s third development project called Payara, will produce 220,000 bpd by 2025.
In terms of sheer numbers, Petroleum Experts, Dr. Remi Piet and Arthur Deakin recently noted that the Payara field is by no means, just another ordinary oil development project. According to the industry stakeholders, Payara is a one-of-a-kind development that represents an estimated US$465 million in annual revenues for the government based on Brent Crude at U$40/barrel. In a recent opinion piece that they co-authored, it was noted that this is nearly half a billion dollars that could be used for schools, hospitals, and the strengthening of Guyana’s inadequate sea defences.
Taking this into consideration, Dr Piet and Deakin, two senior officials at Americas Market Intelligence (AMI) and Africa Market Intelligence (AfMI), are of the firm view that delays in approval for the Payara project are not in Guyana’s interest. They have since advocated for the approvals to be granted without haste.