For now, Guyana is the latest envy in the world of oil and gas. Its deepwater projects, particularly those in the ExxonMobil-operated Stabroek Block not only offer low breakevens and high-quality oil but from an investment perspective, the country also offers a relatively stable regulatory framework that is particularly appealing for oil majors.
But even with such hard-to-match characteristics, the new oil producer still has to put in the work to remain the “preferred investment target” of the industry says Senior Analyst attached to Americas Market Intelligence (AMI), Arthur Deakin.
In his most recent commentary on Guyana, the Analyst opined that Guyana will need to ensure it remains attractive since the world is undergoing an energy revolution. Not only are countries moving further away from fossil fuels but oil majors are committing to doing so too. This is in keeping with the Paris Agreement which calls for global temperatures to be reduced to at least 1.5 degrees Celsius.
To sustain this investor momentum, Deakin said the government must continue to provide an attractive regulatory framework, and a sensible local content rule, to make Guyana the most appealing fossil fuel investment opportunity in the world.
To ensure citizens partake in the development of the country, the Senior Analyst said Guyana needs a local content policy with realistic targets that are simple and easy to enforce.
He warned that an overly idealistic framework would not address Guyana’s capabilities on the ground, where it is struggling to meet the needs of one oil vessel, the Liza Destiny, and has been forced to rely on Trinidad and Tobago for 70 percent of its shore-based services.
