Guyana – One Of The World’s Last Oil And Gas Frontiers

(The Geological Society of Trinidad, 21.Oct.2021) — ExxonMobil recently announced that their recoverable oil and gas resources in Guyana had reached an unbelievable ten billion barrels of oil equivalent.

The first discovery was in 2015 and six years later Exxon and Guyana have achieved the unimaginable. Guyana accounts for 20 per cent of the world’s conventional oil found in the last five years. The cost of extraction is also considered the lowest in the world for deepwater (US$25 to US$35 per barrel).

Liza Phase 1 was the fastest deepwater field in history to move from discovery to production (under five years). And before 2030, with under 800,000 citizens, Guyana will produce more than one barrel per day for each of them.

Exxon, still the world’s largest multinational oil and gas company, operates three blocks in Guyana (Stabroek, Canje and Kaieteur), under production sharing contracts granted by the government.

Exxon, Hess and CNOOC (China National Offshore Oil Corporation) are partners in the Stabroek block (45 per cent, 30 per cent and 25 per cent respectively).

Other blocks have stakes from well-known companies like Total and Qatar Petroleum, and smaller independents like Frontera Energy, Ratio Oil and Eco Atlantic.

So far, over 20 oilfields have been discovered in the Stabroek block, which spans over 27,000 sq km. For comparison, Trinidad is just over 5,000 sq km. The fields are in water 1km to 2km deep. The discoveries are all of Upper Cretaceous age (66 to 100 million years ago) and are all sandstone reservoirs (except for one discovery, Ranger, which is limestone).

Ancient river and canyon systems flowed out from the continent, and the sands in these systems became encased in clays over millions of years. The sands later became charged by hydrocarbons migrating from underlying shales. Unlike Trinidad, there are few faults and folds in the rocks here, so the traps are all stratigraphic (caused by changes to the rock strata), and not created due to tectonic activity. It is worth noting that stratigraphic deepwater plays are quite rare and are considered very risky.

The first field found was Liza, already producing 120,000 barrels of oil per day (bopd).

Liza’s oil is light (32 API) and sweet (low sulphur, 0.5 per cent) and thus highly valuable. Again, Trinidad’s oil production is currently about 60,000 bopd. Last week, Exxon’s latest exploration well Cataback-1, was deemed a major discovery, taking the total recoverable resources to over 10 billion barrels of oil equivalent. The 20-plus fields in Stabroek have been named after fish such as Liza, Turbot, Tilapia, Redtail and Payara.

Let’s pause to elaborate on the concept of recoverable resources.

Typically, the amount of oil that is recoverable from a reservoir may be between ten and 40 per cent of the total oil in place. The actual amount that is recoverable depends on a multitude of factors including porosity and permeability of the reservoir rocks, thickness and lateral extent of the sands, density and viscosity of the oil, reservoir pressure and temperature, whether faults and fractures are present, the number of wells that are drilled and how they are placed, and whether secondary recovery techniques like water and gas re-injection are used.

What this means in essence is that for ten billion barrels to be recoverable, that a whole lot more was discovered.

The other key concept is that of barrels of oil equivalent (boe).

Oil is rarely found alone. Most often it will be associated with natural gas. When the reservoirs are produced, both oil and gas come out – 1,000 cubic feet of gas (1mcf) contains about one-sixth the energy content of a barrel of oil.

Therefore one boe is equal to six mcf of gas. So, when Exxon says they have 10 billion barrels boe it means they have already added the oil to the gas. We can compare to Trinidad’s production: 60,000 bopd plus 2.7 billion cubic feet per day equals roughly 550,000 boe per day.

Oil is being produced from the Liza field via 17 subsea wells and an floating production storage and offloading vessel (FPSO). Eight of these wells are producing the oil; six are reinjecting water from the reservoir and three are reinjecting gas. The water and gas are coming out with the oil, being separated on the FPSO, and injected back into the reservoir to maintain pressure, which in turn, keeps the oil flowing at high rates.

The Liza Destiny FPSO is producing 120,000 barrels per day. The Destiny can store up to 1.6 million barrels of oil (just under 14 days of production). This means roughly every ten days, a tanker will sail to the FPSO, and be filled with oil, then sail to whichever location the buyer has requested.

Here, there is no platform with fixed legs on the seabed (the FPSO functions in its place) and there is no need for the oil to ever touch the Guyana mainland.

The second FPSO, the Liza Unity, will come online in 2022, with a capacity of 220,000 bopd. The Prosperity FPSO will start producing the Payara field in 2024, at 220,000 bopd. There are plans for at least three additional FPSOs by 2030, which will take Guyana to over one million bopd. By 2035, Guyana could be in the top 15 oil producing nations.

And all of this is just based on what Exxon has discovered so far in a portion of one of its blocks. Exploration in the other blocks have already started (so far, no major successes). Two wells were drilled in the Canje block, both dry, and a third is ongoing. One well was drilled in Kaieteur and was deemed a non-commercial oil find. However, a major campaign in this block will start next year. This month there are seven rigs drilling offshore Guyana, two in Suriname and one in Trinidad.

The operators in Guyana have also been going at full speed. Tullow drilled two wells in their Orinduik block in 2019, and both were oil discoveries. However, both found heavy, high sulphur oil, which is much less valuable than the light oil Exxon found. Analysis in ongoing but it doesn’t seem Tullow’s finds will be commercially viable. They may drill again in 2023.

Repsol drilled the infamous Jaguar well in 2012, which never reached its target due to safety concerns. In 2020, they announced that Carapa-1 in the Kanuku block was a small oil discovery, but also non-commercial. This was still encouraging enough for them to plan another well for 2022.

The well that is most exciting at present is CGX’s Kawa-1 currently underway in the Corentyne block. It’s a very deep well at over 20,000 ft. Results are expected by the end of November. They already have plans for a second well in their other block, Demerara.

Exxon’s discoveries are all along a very clear trend that extends into Suriname. Since 2020, Apache, Total and Petronas have drilled along this trend in their Suriname blocks, and have also had large discoveries, amounting to approximately 1.5 billion boe of recoverable resources. As exploration continues, Suriname is also expected to follow in Guyana’s footsteps, albeit the fields appear more gas prone.

As countries and companies move toward a greener future, phasing out hydrocarbons, the Guyana-Suriname Basin is quite possibly the world’s last conventional mega-basin for oil and gas. With low breakeven costs, high quality oil and favourable tax terms, Guyana tops every operator’s metrics. The future of this basin and these countries will be on show for decades to come.


The Geological Society of TT is a professional and technical organisation for geologists, other scientists, managers and individuals engaged in the fields of hydrocarbon exploration, academia, vulcanology, seismology, earthquake engineering, environmental geology, geological engineering and the exploration and development of non-petroleum mineral resources.