Guyana has emerged as a significant oil producer following discoveries by Exxon and its partners in the Stabroek Block off its coast. The country’s oil output has grown rapidly, reaching over 1 million barrels per day in recent months, with cumulative production from the block surpassing 1 billion barrels by September. Exxon, operating alongside partners Hess Corp and CNOOC, has deployed four floating production vessels to develop the field, and the consortium plans to expand capacity to 1.7 million barrels daily by 2030 through eight offshore projects.
Alongside crude oil resources, Guyana possesses natural gas reserves that the government had sought to monetize through exports. Two years ago, the government launched a tender for liquefied natural gas development, ultimately selecting Fulcrum LNG, a company founded by a former Exxon executive, to develop what was projected as a $30 billion project. However, progress on the LNG initiative has stalled, primarily due to constraints on available natural gas supply.
A significant impediment to the LNG export plans stems from Exxon’s operational requirements. According to reports, the company requires approximately 2 billion cubic feet of natural gas daily for reservoir pressure maintenance, a process essential for sustaining targeted oil production levels. This substantial demand for gas injection leaves insufficient volumes available for liquefaction and export purposes.
In response to this supply constraint, Guyana’s government is evaluating alternative strategies. One option involves dedicating domestically produced gas to domestic applications, including power generation and petrochemical manufacturing. A second approach would reduce the planned LNG facility’s annual capacity from 6 million tons to 3 million tons. Exxon has indicated it is currently assessing the gas yield potential from its Stabroek Block operations, along with extraction costs and production timelines. Company representatives stated they are collaborating with the government to develop plans that optimize resource value for Guyana, while ensuring gas supply development aligns with market demand growth.
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