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Sun, 9th Aug 2020 16:15:00 |
Are Oil Majors Giving Up On Guyana? |
Guyana has become one of the main upstream stars of the past decade, rising from zero to hero in less than 5 years. Much of Guyana’s rise to prominence took place as its first and largest offshore discovery, the Liza field, was commissioned in late 2019. As attentive Oilprice readers already pointed out, with the passing of time Guyana is starting to look and act more Latin American as resource nationalism is holding sway over its politics. This is in and of itself not unreasonable, yet in COVID-impacted times when CAPEX cuts are omnipresent, it might be a bit inopportune. Hence, as Guyana learns to live under a new presidential administration, Guyana’s bright hydrocarbon future has started to run against its first structural challenges. The first warning bell came in the form of a Rystad Energy report which stated that Guyana risks losing a whopping 1.5 billion in revenues if ExxonMobil, the operator of the Stabroek Block, decides to postpone the Payara project by one year, from the initially assumed commissioning date of 2023 to 2024. Concerns about forthcoming projects being delayed did not emerge out of a clear sky, in May the US major warned that the elections helter-skelter had resulted in a significant slowing down of government approvals, jeopardizing the Payara development plan. Rystad currently estimates that Payara would come onstream in 2024, with the sanctioning date slipping half a year into H1 2021. This means that all projects assumed to be launched after Payara (Snoek, Talbot, Ranger, Jethro-Lobe etc.) in the mid-2020s might see further delays down the line.
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