Guyana emerging as one of the better frontier prospects for oil and gas with Exxon declaring its third major success offshore.
BE2C2 Report — A discovery by Exxon Mobil off the coast of Guyana suggests the country is emerging as oil and gas sector’s next major hot spot.
Exxon announced the new discovery at its Snoek well offshore Guyana earlier this week.
It’s the third such discovery for the supermajor, and drilling was in reservoirs similar to those previously encountered.
In its declaration of discovery, Exxon said Snoek was part of a “significant,” but technically complex, offshore prospect.
Attention to Guyana follows support from the International Monetary Fund of national plans to develop a legal framework for managing its oil and gas wealth.
The IMF said growth for Guyana was steady, but uneven, with a gain in real gross domestic product of 3.5 percent expected this year, driven in part by expansions in the broaderoil and gas extractive industries.
Eco (Atlantic) Oil & Gas Ltd. said Friday that Exxon’s third discovery offshore Guyana solidified the country as an emerging prospect in northern South America.
Gil Holzman, the company’s CEO, said the Snoek discovery shows Guyana is emerging as one of the better oil and gas prospects in the world.
“Such developments merely reinforce the board’s growing conviction that Eco-Atlantic’s collection of international oil and gas prospects represents a significant, potentially world-class portfolio,” he added.
A survey from the U.S. Geological Survey finds the waters off the coast of Guyana may be among the more lucrative oil basins in the world, with a mean undiscovered resource potential at around 15.2 billion barrels.
Exxon hasn’t yet announced development or investment plans, which could be complicated by low current oil prices and a dispute with neighboring Venezuela.
Venezuela has for decades claimed two-thirds of Guyana’s territory as its own, arguing that the gold-rich region west of the Essequibo River — and the resulting maritime zone where Exxon’s find lies — was stolen from it by an 1899 agreement with Britain and its then-colony.
Diego Moya-Ocampos, analyst with the London-based consulting firm IHS Global Insight, said he believes Venezuela’s claim of sovereignty will pose a “major complication” to recovering oil and minerals.
But Guyanese authorities are racing to set up rules and plans to administer the hoped-for new industry while avoiding what is known as the “resource curse.” In places like Congo and Nigeria, oil or mineral wealth has fueled conflict instead of development.
Guyana has long been one of the hemisphere’s poorest places, a sparsely populated nation (750,000) on South America’s northern shoulder that relies heavily on exports of sugar, rice and gold.
With oil and gas discovery things are expected to change. Guyana Geology and Mines Commissioner Newell Dennison said his agency is on “a frenzied mission” to train local petroleum engineers, geologists and lawyers.
Exxon officials have told lawmakers that they plan to have supertankers pull up alongside rigs and cart away fuel pumped from the seabed because the wells are too far from the coast to run pipelines.