The international data analytics and consulting company GlobalData has cited oil recovery pursuits in Guyana’s maritime space, going forward as a factor likely to push South America past North America’s by 2024.
Last week international oil and gas journals were citing the research revelations of GlobalData which was also pointing to various oil recovery projects in neighbouring Brazil which had already secured final investment decisions and are now less likely to face postponement challenges. By contrast, the GlobalData study noted that various key projects offshore the US have already been victims of COVID-19-related delays while recovery initiatives in Mexico have experienced sharp declines. The GlobalData study is attended by a comment by one of its Senior Analysts who is quoted as saying that “delays and pending approvals will not help North America reverse its declining trajectory, as production is expected to drop by 15% over the period of 2022-2024. Improving the region’s trend will require a combination of factors not exclusive to better market pricing to support project economics, enhanced recovery for existing projects and the expansion of resource base especially in Mexico.” The source also notes that “projects in the US and Canada have been bottlenecked by pipeline capacity.”
GlobalData says that largely due to the positive trend in South America, notably Guyana and Brazil, oil production for the region is expected to increase from 8.65 million barrels of oil per day this year to 9.15 million barrels in 2024.
With regard to Guyana’s projected contribution to the increase in South America’s oil production the GlobalData spokesperson says that “Guyana’s ultra-deepwater projects in the frontier Guyana-Suriname Basin have breakeven oil prices as low as $23/bbl, with short-term production expected to grow 10-fold by 2024 from projects such as Liza Phase 2.”
With regard to Brazil’s projected contribution to the sharp spike in hemispheric oil production GlobalData says that “Brazil’s prolific pre-salt (oil recovery) region is surviving the industry downturn mainly due to the robust economics of its current and upcoming projects – a result of high productivity, high-quality crude wells.” Projects in this region, it adds, have breakeven oil prices as low as $35 per barrel (/bbl), compared to Brent’s current price averaging $40/bbl. Additionally, it says that the Brazilian state-owned oil company Petróleo Brasileiro has steadily “streamlined its portfolio to focus on exploration and production activities in the pre-salt layer, while divesting non-core assets in onshore, shallow water and post-salt areas.”
Last week, another GlobalData report was pointing to what it says are multiple oil refinery closures “across Asia and North America, some of which closures, it says, will be permanent. The Research entity also said that while the prospects of a COVID vaccine had triggered a measure of optimism among traders that fuel demand could make a comeback on 2021, it was felt that a potential vaccine was unlikely to impact oil supplies by January next year since a coronavirus immunization programme was expected to be rolled out over a period of time.