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New South American Energy Alliance Could Be A Gamechanger For Oil Markets

The hottest oil countries in South America—Guyana, Suriname, and Brazil—are set to discuss later this week the setting up of a new energy alliance and building infrastructure across the countries to share their growing oil and gas resources.

The heads of state of Brazil, Guyana, and Suriname will discuss on Friday joint infrastructure and energy projects that would boost the countries’ economies and help oil equipment transportation, exports, and imports.  

Before the three-way summit, Brazilian President Jair Bolsonaro is set to visit Suriname on Thursday and travel with his Surinamese counterpart to Guyana on Friday.

Construction of roads, bridges, and a deepwater port in Guyana will be among the topics discussed.

“The deepwater harbour is a major part of our transformation agenda, and we want Brazil to be part of it,” Guyana’s Foreign Secretary Robert Persaud told Reuters earlier this week. “Guyana offers the shortest and quickest access to the Atlantic for significant parts of northern Brazil,” he added.

The three heads of state are also expected to discuss the Arco Norte project—a 3,000-MW power link to connect Guyana, French Guyana, Suriname, and Brazil.

Brazil has long been a major oil producer in South America, while Guyana and Suriname have only recently become the next hotspots offshore the continent.

One of South America’s poorest countries, Guyana, became a major holder of oil and gas reserves in 2015 when ExxonMobil found oil in its waters in what turned out to be a block with resources estimated at 10 billion oil-equivalent barrels and counting. Now Guyana wants to capitalize on the large oil and gas discoveries over the past half-decade to build up an economy powered by its own energy resources. 

Suriname, too, hopes to replicate Guyana’s success. According to the U.S. Geological Survey, the Guyana-Suriname Basin could hold up to 32.6 billion barrels of undiscovered oil resources, underscoring the tremendous hydrocarbon potential that the countries share.

By Charles Kennedy for Oilprice.com

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Charles Kennedy

Charles is a writer for Oilprice.com More