Despite eight new discoveries, Guyana’s government claims its oil reserves have only increased by $600 million.

Despite eight new discoveries, Guyana’s government claims its oil reserves have only increased by $600 million.

August 15, 2024
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…but ExxonMobil partner CNOOC reported a discovery in 2023 with 746 million barrels of reserves

Kaieteur News – ExxonMobil’s partner China National Offshore Oil Corporation (CNOOC) said in its 2023 annual report released this year that Lancetfish, one of the eight new discoveries discovered in April 2023, has an average resource volume of 100 million tons, equivalent to about 746 million barrels of oil reserves.

However, the Guyana government claimed on Wednesday that oil reserves had only increased by 600 million barrels since the last update in 2022. The apparent contradiction, made during a televised press conference, will further undermine the government’s claims of being transparent in its dealings with citizens in the oil and gas sector.

Commenting on the S&P Global estimates at a press conference on Wednesday, Natural Resources Minister Vikram Bharat said: “That is not the case. In terms of resources, we have had a very small increase. I think we are now at 11.6 billion barrels of resources. The offshore oil equivalent in the Stabroek block is now 11.6 billion barrels, which in itself is a significant discovery.”

He believes that the analytical companies do not have the data to base their analysis and calculations on because the government and ExxonMobil are the “custodians” of the data. If ExxonMobil wants to present or share any data, especially at international conferences, Barratt said it must be approved by the government. “So I am not sure where the analysts got the data for Guyana.” “Like some people say we have 18 billion in reserves, I honestly don’t know where they got the data from because ExxonMobil and the Guyana government have the data, we have consultants who work with us, but these people have made up a number out of thin air,” he lamented.

The minister explained that if the country did have 18 billion barrels of oil reserves, they would not hide it. “If we had 18 billion barrels of oil reserves, we would say so because it is good for our country. In fact, there is no reason to hide it. Hiding it will only bring our country’s economy to a standstill.”

Bharrat warned the media, “We have to be realistic, we have to be honest, we can’t lie to people and say we have $18 billion, and whoever said that, I don’t know where they got that information from, but it certainly wasn’t from Guyana. I can tell you that.” He was certain that the information the company used didn’t come from “ExxonMobil, it wasn’t from the Department of Natural Resources, it wasn’t from the Guyana Mining Company. I don’t know; maybe they have some kind of magic wand that can pull the data and then determine how much resources we have.”

The government’s unchanged tone

Despite three different reliable sources reporting a significant increase in the country’s reserves, the government has maintained its unchanging tone: “There has been no significant increase.” The Vice President has been repeatedly asked about the status of reserves after each disclosure, and his response has always been “There has been no significant change in reserves.” Exxon Guyana Manager Alistair Routledge has maintained the same statement.

International experts from US analytics firm S&P Global recently estimated current reserves at 18.7 billion barrels, higher than an estimate made in May by Welsh Development Agency chairman Asghar Ali, who put reserves at at least 15 billion barrels.

Welsh Development Agency Chairman Asghar Ally said in January that about 15 billion barrels of oil had been discovered in the Stabroek block. Ally, a former Jamaican finance minister and deputy governor of the Bank of Jamaica, represented Guyana at the Jamaica Stock Exchange meeting in January.

In an interview at the conference, he revealed that another 4 billion barrels of oil had been discovered. “As of now, we don’t know the full extent of the oil reserves, but the reserves are huge, and I can explain what that means. About… I would say they have discovered at least 15 billion barrels of oil in the (Stabroek) block. So at this point, I would say ExxonMobil has discovered 25% to 35% of that,” said economist Ally.

Despite this, Alli said more than 4 billion barrels of oil had been discovered. Moreover, he explained: “If you have time, I can explain to you what happened. You see, at one stage, Africa and Latin America were connected. So West Africa was closer to the coast of South America, Venezuela, Guyana, Suriname were part of it, and there was an oil basin under the coast of South America, a huge oil basin.” “We are discovering new oil every day… No one knows the full extent (but) they are discovering more every day,” he added.

Meanwhile, U.S. analytics firm S&P Global Inc. said in a May report that Guyana’s oil reserves have increased to about 18.7 billion barrels of recoverable resources since 2015. The report was prepared by S&P Global Commodity Insights analysts Fernanda Machado, Mariana Anjos and Jerry Jarvis.

“In just nine years it has become the fifth largest (basin) in Latin America and it continues to grow,” the analysts said. They said production is expected to peak in 2037 at 2.3 million barrels of oil equivalent per day, with 90% oil. “High-quality, low-emission and cost-effective barrels of oil are already entering the European market,” the analysts said. “Currently all gas production is tied to oil and reinjected, but sales of gas are expected to increase.”

There are concerns about the lack of transparency regarding the country’s oil reserves. The Guyana government has failed to regularly inform the public about the state of the reserves and how they are being managed. In April, Vice President Bharrat Jagdeo explained that while ExxonMobil’s recent discovery was large, it did not mean the country’s overall oil reserves would increase significantly.

“Now, some people have suggested that information was being withheld, and that’s false. I point out to you that we get these reports every three months that say what the reserves are, and there have been no significant changes in the last year or so, so it’s not that information that we have is being withheld,” the vice president told reporters. According to him, “the information about the reserves is part of that report, and the reserves are approximately 11 billion barrels. I pointed out… that discovery does not mean you know the size of the reserves. To get reserves of that size, long after the discovery, you have to do an assessment, look at the rock types, and it’s a complex process, and then you get the reserves.”

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Lede: ExxonMobil partner China National Offshore Oil Corporation (CNOOC) said in its 2023 annual report released this year that one of the eight new discoveries, Lancetfish, discovered in April 2023, has an average reserve of 100 million tons, equivalent to about 746 million barrels of oil. However, despite the discovery of eight new discoveries since the last resource update in 2022, the government claims that Guyana’s reserves have only increased by 600 million barrels.

Tags: ExxonMobil, Vikram Bharat, Natural Resources, Reserves, New Discoveries

Focus: Despite eight new discoveries in two years, government claims reserves grew by only 600 million

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Image caption: Natural Resources Minister Vickram Bharrat.

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