From 2019-26 –A Billion Barrels (Will This Oil Last)

From 2019-26 –A Billion Barrels (Will This Oil Last)

OPINION BY: GHK LALL 

In over six years, 10 percent of Guyana’s stated oil reserves is gone.  There’s confidence that Exxon will find more replacement oil.  The company may have come across more proven reserves than it has been saying.  But that’s for another day.  It is a rather lonely figure that 11.6 billion barrels.  Stuck at midnight for several years now.  If 10 percent of Guyana’s current oil reserves is out from under the seabed in over six years, then there’s 50+ years of production left. 

That is, barring new discoveries, which should only be a positive.  There is, however, a little number that should have caught the eye of Guyanese who watch these developments.  The date and number are part of the fine print.

Guyana announced First Oil in December 2019.  Just under five years later, a half billion barrels dug up was the milestone reached in November 2024.  Not bad for a new oil producer with almost zero capacity of its own.  Now for the uppercut.  From December 2024 to July 2026, a total of 18 months, the second half billion barrels were pumped from the sea to the tankers.  Now, isn’t that something.  From the relatively pedestrian trot of a half billion barrels in 59-60 months, to the gallop of the second half billion barrels in 18 months, give or take.  Howzat for acceleration of production!

From a quarter million barrels at the onset to closing in on a million barrels daily today.  Exxon, with the freest hand from the Government of Guyana, is going great guns.  Exciting numbers that are poised to grow more thrilling by the end of this year, by the end of next year, and by 2029.  I take all of those for granted, but do not factor them (yet) into what is about to be shared. 

With a half billion barrels of oil produced in the last 18 months, that’s a billion barrels every three years, using the current production rate of 870,000 to 900,000 barrels daily.  I think that my fellow Guyanese may already have seen what I see, where I am heading.

All things being equal (proven reserves remain at 11.6 billion barrels less the billion extracted, and 900,000 barrels daily, this oil is not going to last 50 years.  Thirty years is a fair estimate, albeit a back-of-the-envelope one.  When the yearend project waiting to be keyed in is added, that’s over a million barrels a day.  It reduces the lifespan of the reserves.  When the other projects, a total of seven in all, are up and running, the daily production rate is slated to be 1.5 million barrels approximately. 

These are official numbers, not mine.  At 1.5 million barrels a day and round the clock (24/7) production that is 547.5 million barrels a year.  Unless Exxon hits a big pool of oil, the reserves on hand could be gone between 20 and 25 years.  I have every confidence that Exxon will strike oil in a timely manner to refill the proven reserves bank.  Not to mince any words, I believe that Exxon has already latched onto enough reserves to keep the oil flowing out of Guyana well beyond this 20–25-year horizon that I share.  To put it delicately, it is purely a matter of timing for the company.

I apologize for the approximations and rough estimates, but I work with what is available.  A half billion barrels in almost five years, followed by the spectacular production spike to a half billion barrels in just about a year and a half. 

Production speed increased more than threefold, while proven reserves are stuck at 11.6 billion barrels, one of which is now history.  There will be more oil found.  Take my word on that one. 

It’s what Guyana does with its oil earnings.  It will go a long way in making Guyanese feel that there was oil and they shared in a piece of it.  Otherwise, this oil wealth could be gone. 

Poor Guyanese could still be asking themselves if oil was really found here.  Then, lament that it never touched them.