Latin America is a major player in the world of oil. Brazil and Venezuela dominate the continent’s position in oil production, and continue to attract interest from the largest oil and gas companies from around the world.
But there is burgeoning interest in one corner of South America that does not have Latin roots. Along the northern coast of South America are a few countries that are rarely discussed in the world of geopolitics, let alone in the world of energy. Guyana and Suriname, two small, lesser-known countries along South America’s Caribbean Coast, could one day become energy players. The two countries of Anglo and Dutch colonial origins are starting to garner attention from a growing number of oil executives, and for good reason.
The US Geological Survey concluded in 2000 that Guyana may have the second largest oil and gas potential out of all unexplored basins in the world, with a possible 15 billion barrels of oil and 30 trillion cubic feet of natural gas. Much of that is still unexplored.
But that could change soon.
On May 20, ExxonMobil (NYSE: XOM) announced a “significant” discovery just off the coast of Guyana. Located 120 miles from the coast in the Stabroek Block, ExxonMobil, through its subsidiary Esso Exploration and Production Guyana Ltd., “encountered more than 295 feet (90 meters) of high-quality oil-bearing sandstone reservoirs.” The Liza-1 well was drilled to a depth of more than 17,000 feet (more than 5,000) meters. “I am encouraged by the results of the first well on the Stabroek Block,” Stephen M. Greenlee, president of ExxonMobil Exploration Company, said in a statement. “Over the coming months we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block.” Esso owns a 45 percent interest, Hess Guyana Exploration – a subsidiary of Hess Corp. (NYSE: HES) – owns 30 percent, and a subsidiary of China’s CNOOC controls the remaining 25 percent.
The discovery will heighten interest in Guyana’s oil and gas sector, which is vastly underdeveloped at this point. In fact, Guyana and its neighbor Suriname are starting to attract global attention as a region that has high potential. And the fact that oil drillers have not combed the waters off the coast of Guyana and Suriname is a plus – there is the potential…