Guyana, Suriname Oil Bonanza to boost economy, help meet global demand – Rise thanks to that?

Are from MasterSource

By Vijay Jayaraj

“Equatorial Guyana and Suriname have combined oil reserves estimated at 17 billion barrels of oil equivalent. The biggest barrier to exploiting these reserves could come from a lack of capital…if the international climate industry consortium takes a strong stand against their mining plans and their governments acceptance. “

Poor Caribbean nations like Guyana and Suriname hit the jackpot when they discovered huge offshore oil reserves that have been on track to generate revenue for decades.

Opposition from the United Nations and other anti-hydrocarbon organizations may hinder the pace of production but will not stop it. The global demand for a lot of crude oil is too great, and economic situation of two South American countries is too dire.

Suriname has been experiencing double-digit inflation for a while (35 percent in 2020). The inflation rate is now over 50 percent due to the ongoing global energy crisis. By Suriname economy down 3.5% by 2021. Guyana’s economy is in a similar situation, with 40% of Guyana’s 800,000 people living in poverty.

All of this could change now, thanks to the discovery of oil.

Equatorial Guyana and Suriname – located next to each other and bordering the equator and the Atlantic Ocean – have combined oil reserves estimated at 17 billion barrels of oil equivalent. Together, this represents the world’s largest oil discovery in the past two decades. Some call it “most promising oil discovery hotspot on earth.” Other Speak it is “the most exciting oil frontier on earth.” In addition, there are gas reserves of more than 30 trillion cubic feet.

According to a Hess Corporation report, Guyana’s largest oil block – Stabroek – “is operated by ExxonMobil’s subsidiary Esso Exploration and Production Guyana with a 45% stake while Hess Guyana Exploration and CNOOC Petroleum Guyana hold 30 and 25% shares, respectively. Guyana will supply 1 million barrels per day (bpd) by 2027.

In Suriname, TotalEnergies and its partner Apache discovered large oil reserves in the offshore Block 58. Block 58 is ““lie on the same fuel distribution run through Guyana’s Stabroek Block. “

Around 2035, production from Guyana is expected to reach around 1.4 b/d and from Suriname at 650,000 b/d, putting them in the top 5 oil producing countries in South America.

Still, analysts believes that output from Guyana could be much higher: “by all indications, based on the latest developments, that output will be much higher by 2027.” Government officials in Georgetown [Guyana’s capital] believes that crude oil production could reach 1.5 million barrels per day, or more, from 12 Floating Warehousing and Handling facilities within the next five years.”

The biggest barrier to tapping these reserves can come from a lack of capital. Both Suriname and Guyana have the “underdeveloped capital market with limited financing options” for new projects. These countries will be under severe financial strain if the international climate industry consortium takes a strong stance against their mining plans and their governments approve.

But awareness of this is growing among leaders, who are rushing to cut foreign investment. Last week, Guyana President Mohamed Irfaan Ali promised that “his government will remove bureaucratic barriers to smooth the journey for Saudis looking to invest in his country.”

It is generally assumed that the global market will determine the development of oil fields in these countries. With the International Energy Agency’s forecast for continued increased oil demand, one would expect crude from Guyana and Suriname sell fast.

This will prove to be mutually beneficial for global supply and the growth of local economies. Matthew Smith said at Oilprice.com,

Guyana will become the world’s top oil exporter with petroleum production far outstripping domestic demand, while government coffers will swell with projected annual income of more than $10 billion. la every year for less than a decade,” he speak.

Guyana and Suriname’s ability — and their right — to grow economically using their oil reserves will not be hindered by extreme climates.

Vijay Jayaraj is a Research Associate at CO2 AllianceArlington, VA and a Contributing Writer with Cornwall Alliance for Creative Management. He holds a master’s degree in environmental science from the University of East Anglia, UK and resides in Bengaluru, India.