Exxon’s Oil Boom Could Keep Guyana’s Gas at Home

Guyana has recently become a notable player in the oil industry, with ExxonMobil discovering billions of barrels of oil off its coast. As oil production increases, the country is considering whether to keep its natural gas reserves for domestic use instead of exporting liquefied natural gas (LNG). In 2017, Guyana's oil exports were already reaching over 1 million barrels per day, a significant milestone achieved in just 10 years after the initial discoveries.

ExxonMobil, along with Hess Corp and CNOOC, played a key role in the rapid development of the Stabroek Block, bringing in four floating production, storage, and offloading vessels to maximize oil production. By September 2021, wells in the block had produced a cumulative 1 billion barrels of oil. ExxonMobil and its partners, including Chevron, have ambitious plans to expand production capacity to 1.7 million barrels per day by 2030.

However, the availability of natural gas for liquefaction is a limiting factor for LNG export projects. ExxonMobil needs approximately 2 billion cubic feet of natural gas daily to stimulate production in their existing oil wells, and there appears to be insufficient gas production from the Stabroek Block to make an LNG export project economically viable.

As a result, the Guyanese government could choose to keep the gas for domestic consumption, including power generation and petrochemical production, or reduce the planned LNG facility's annual capacity from 6 million tons to 3 million tons. ExxonMobil has stated that they are working with the Guyanese government to optimize resource recovery and maximize value for the country.