Just when Caribbean Community nations are scrambling to find an alternative supplier for oil, the region’s largest nation is preparing to crank up its own petroleum industry as age-old supplier Trinidad fades steadily away.
In the past month, Petrotrin, the community’s major refinery in Trinidad, shut its doors as authorities there prepare to restructure and retool a decades-old facility that was losing millions daily, burdened down by massive overstaffing and the need for new equipment to keep pace with today’s demands.
But just as government officials have told their regional neighbors to find other oil suppliers, perhaps until it reorganizes, ExxonMobil down south in Guyana announced its 10th major oil well find of the 12 commercial efforts it has drilled so far.
Officials say that the strike rate of 10 of 12 successful wells is among the best ever for an offshore drilling campaign and is putting Guyana in line to become one of the largest producers in the hemisphere in the very near future.
Exxon, which first announced a commercial oil and gas find in mid-2015, said that its estimated tally of oil reserves at its offshore concession is now set at more than 5 billion barrels with the successful drilling on its Pluma-1 well.
Commercial production is expected to begin as early as the last quarter of 2019 or in the first weeks of 2020 at a level of approximately 120,000 barrels per day, rising to as much as 750,000 in approximately five years after initial startup.
To ensure oil security, regional trade ministers had just weeks ago removed taxes on oil imported from outside the region in the wake of Trinidad’s announcement that it will no longer be able to be a reliable supplier because of the closure of the Petrotrin refinery. The announcement has forced governments to look for alternative suppliers from outside the region, and now all eyes are on Guyana to determine if it will be able to take up the slack and become the regional family supplier.
In all, Exxon and partners, Hess Oil of the U.S. and Nexen of China, plan to drill approximately 17 wells in its first phase of the oil and gas rollout. Approximately eight of these wells will be actual production wells. The remainder will be used to either pump in mud and water to push oil up to the surface and onto three massive floating, production and storage ships.
The company has already brought three massive drill ships into the concession to speed things up to make Guyana one of the world’s newest producers.
As Trinidad attempts to reorganize, neighboring Suriname is also following in Guyana’s footsteps, using some of the same companies with large concessions in Guyana—Exxon, Tullow Oil of the United Kingdom and Repsol of Spain. Experts say that it is just a matter of time before Suriname follows Guyana with large discoveries because it is in the same general basin that Exxon is preparing to exploit.
“The discovery of a resource base of more than 5 billion oil-equivalent barrels in less than four years is a testament of our technical expertise and rigorous evaluation and pursuit of high-potential, high-risk opportunities in this frontier area,” said Neil Chapman, ExxonMobil senior vice president. “We will continue to apply what we’ve learned to identify additional exploration prospects and potential future discoveries that will deliver significant value to Guyanese people, our partners and shareholders.”
Guyanese oil czar Mark Bynoe called the latest discovery “great news for Guyana.”
He added, “The country is on the cusp of transformational development for current and future generations and the news of ExxonMobil’s 10th discovery offshore Guyana is expected to facilitate the country’s realization of substantial social and economic improvements.”