The Mystery of Guyana’s Oil Reserve: Unveiling the Truth

The content originally appeared on: News Americas Now

By Darshanand Khusial

News Americas, NEW YORK, NY, Fri. Feb. 23, 2024: Imagine if you didn’t know the amount of money in your family’s primary bank account for the past 2 years. Would you borrow money at exorbitant interest rates when you didn’t need to? Would you skip on meals for your family because you thought you didn’t have enough money?

It will soon be two years, since Guyana’s oil reserve in the Stabroek Block was estimated at 11 billion barrels in April 2022. In the first years of offshore exploration, Exxon used to provide progressive updates of estimates of the total petroleum reserves after every discovery, beginning with 1 billion barrels in May 2015. However, seven announcements of oil discoveries in the Stabroek Block have been made public since April 2022 without any oil reserve update. To date, there have been a total of 33 announcements of oil discoveries in the Stabroek Block. Hence, approximately 20% of the oil discoveries are not included in the estimate of 11 billion barrels of oil equivalents associated with Guyana’s offshore oil reserves.

The Oil & Gas Governance Network recommends that the government ministers in charge of the oil sector need to remember the basics of business economics. Even the manager of a small neighborhood shop would know how much stock is in the shop in order to run a successful business. Exxon, though backstopped by the Government of Guyana, appears to dictate to our people that we are not deserving of our sovereign rights to know how much is our wealth and in our bank account!

It so happens that expertise within OGGN is well versed in the fact that calculating reserves is the simplest of tasks that are performed soon after the exploratory well(s) is/are drilled, guided by the data collected during the drilling. Calculating reserves is a standard examination question given to first-year petroleum students. If a first-year student can calculate reserves in a few minutes, why can’t Exxon?

Notwithstanding being abetted by the government, Exxon plays the Guyanese people for dummies to believe that this oil reserve calculation is so complicated to require years, especially when it was done instantly, in the past. As the saying goes, “mout’ open, story jump out”. In mouthing off that they don’t have time to waste in telling us how much oil we own, but only time to make their money, simply proves what we say all the time: that Exxon’s only interest is in making money and not in Guyana’s interest and wellbeing. It therefore begs the question, why, and what kind of Government would want to connive with a foreign company to hide our god given wealth and the amount in our bank account?

Sadly, those in charge of oil policy in Guyana are openly standing on the side of Exxon by hiding new discovery figures. These folks seem to forget they were elected by their citizens to serve the interests of Guyanese, not those of Exxon shareholders. There are many other instances where it is clear that entities in the Government of Guyana are siding with Exxon. Examples include:

–              the government’s joining of forces with Exxon to fight against their own people, who are demanding that Exxon cover all costs associated with an oil spill;

–              waving Exxon on to greedily produce oil 35% above the legal safe operating limits, thus enhancing the condition for an oil spill;

–              secretly changing permits to triple deployment time of the capping stack (i.e. equipment which stops a well blowout) from three to nine days, allowing for a potential extra six days of oil gushing into the ocean;

–              quietly altering environmental permits to the dumping of oil-contaminated, toxic and radioactive water into the ocean, instead of following the international standard of reinjecting back into the ground; and

–              changing permits to incentivize Exxon to make money from flaring by paying a paltry fee that is miniscule compared to the money lost from not flaring.

As concerned Guyanese we request that the government release updated figures on the total energy reserves within a month of a new oil discovery. It is coming up to two years since the last update of 11 billion barrels of oil equivalents in the Stabroek Block. Since that time, we have had at least seven major discoveries including Seabob, Kiru Kiru, Yarrow, Sailfin, Fangtooth SE, Lancetfish and Lancetfish-2. If the first 26 major discoveries totaled 11 billion barrels, then the average discovery contains about 423 million barrels of oil. If we multiply 423 million barrels by 7, then we assume approximately 3 billion barrels of reserves are being hidden from the public. Or stated another way, at US$80/barrel of oil as much as US$240 billion in potential oil revenues are being hidden from the Guyanese people. To put that in perspective, when oil production started in 2019, the national budget for that year was about US$1.5 billion. The recently passed 2024 budget is US$5.5 billion, which still only amounts to about 2% of the unreported oil reserves, we are anticipating. Therefore, OGGN requests the Government of Guyana to update the total offshore oil reserve figures by including the last seven major discoveries made since 2022, now!

EDITOR’S NOTE: This article represents the opinion of OGGN solely and not News Americas. It was written by Darshanand Khusial with contributions from Alfred Bhulai, Andre Brandli, Kenrick Hunte, Joe Persaud and Charles Sugrim.