Guyana Cautious On 2021 Oil Output, Price

(Argus, 15.Feb.2021) — Guyana forecasts average crude production of 109,000 b/d in 2021, 46.7pc above last year but short of initial expectations because of a recurring technical glitch.

The government is predicting a 4pc year-on-year increase in the Brent crude price to around $43.9/bl, finance minister Ashni Singh said on delivering the country’s budget plan. The price forecast is well below the current Ice front-month April Brent crude futures contract price of more than $63/bl.

ExxonMobil is currently producing 120,000 b/d of crude from the deepwater Stabroek block off Guyana’s coast. Around 10,000 b/d of output has been affected by problems with a natural gas compression seal.

The issue that first arose last year had suppressed production to a low of 27,500 b/d in June 2020 and impeded the Liza Destiny floating production, storage and offloading (FPSO) unit from reaching the 120,000 b/d first-stage target until December 2020, nine months behind schedule.

The problem recurred earlier this month, and repairs could take up to eight weeks, the company has said.

ExxonMobil declined to comment on Singh’s 2021 forecast. “We are managing production rates on the Liza Destiny to ensure safe and responsible operations and within permit limits.”

The glitch is “a temporary, unplanned event, and once repairs are safely completed, we will be able to ramp up and produce at full capacity,” the company said.

Oil revenue drove up Guyana’s GDP by 43.5pc in 2020, and growth is expected to hit 20.9pc in 2021, Singh said.

Guyana’s oil income through royalties and exports of its share of crude has reached $206.6mn, vice president Bharrat Jagdeo said.

ExxonMobil started producing 32.1°API Liza crude on Stabroek in December 2019 and forecasts output of 750,000 b/d by 2026.

ExxonMobil has a 45pc stake in Stabroek, with Hess holding 30pc and Chinese state-owned CNOOC unit Nexen with 25pc.

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By Canute James