Guyana’s oil growth potential rises as Venezuela tensions set to ease

GEORGETOWN, Feb 17 (Reuters) – The tiny oil-producing nation of Guyana, already one of the world’s fastest-growing economies, has a window of opportunity for more expansion amid ongoing U.S. activity in neighboring Venezuela, geopolitical and oil experts said ahead of the Guyana Energy Conference.

That growth potential will take center stage at the four-day event beginning on Tuesday in Georgetown, where executives and government officials will gather to discuss efforts to further train the local oil and gas workforce, increase investment opportunities and build a downstream sector.

While Guyana’s oil promise has been buzzing for years, happenings in Venezuela have intensified the spotlight on the entire region after U.S. forces removed Venezuelan President Nicolas Maduro from power last month. U.S. President Donald Trump has since called for $100 billion of investment to reactivate Venezuela’s oil sector.

The development has the potential to ease a long-standing border dispute that pushed the Guyanese government and an Exxon Mobil-led oil consortium to halt exploration in about 30% of the prolific Stabroek Block.

Henry Ziemer, an associate fellow at the Center for Strategic and International Studies, said the odds for political flare-ups between the two countries, at least for now, are very low. “It removes the biggest barrier for foreign investment.”

“If there’s any country that reaps the greatest benefit from Maduro’s removal, I would say it’s probably Guyana,” he said.

Exxon CEO Darren Woods said last month that the U.S. capture and removal of Maduro may lead to better operating conditions in Guyana. The top U.S. oil major operates the Stabroek Block, with Chevron and China’s CNOOC as minority partners. 

“Perhaps we’ll see an opportunity with less naval patrols that’ll make it a little more friendly environment,” Woods said.  

POTENTIAL FOR MORE EXPLORATION

The United Nations’ International Court of Justice is overseeing a court case over Guyana and Venezuela’s border dispute. While a final decision could take years, any sort of détente could aid the lifting of a force majeure that had been placed on a portion of the Stabroek Block located in disputed waters and boost new exploration. 

The consortium raised its oil production capacity in Guyana to more than 900,000 barrels per day last year, and a new project set to be developed this year will further raise ⁠production to up to 1.15 million bpd.

Guyana has become a key South American oil producer since Exxon discovered oil here in 2015, continuing to grow as Venezuela’s oil industry stagnated. 

Exxon executives are expected to share updates about operations in Guyana during the conference, including a large-scale gas plan to support power generation onshore. 

Chevron CEO Mike Wirth will also mark the company’s first official appearance at the conference on Tuesday, after the U.S. oil producer acquired a 30% stake in the Stabroek Block following a lengthy legal battle against Exxon.

The company has said it believes the oil and gas resource available in Guyana could be more than the current estimate of 11 billion barrels of oil equivalent, and that it was eager to help with additional exploration.

When asked about Chevron’s comments in a November interview, Exxon’s Woods told Reuters that the company has a fiduciary responsibility to update the resource estimate when it has information to share. “We don’t have any announcements at this point to update that resource base, despite the work we’ve been doing.”

(Reporting by Sheila Dang in Georgetown, Guyana;Editing by Nick Zieminski)