ExxonMobil Expands Guyana Oil Production Ahead Of Schedule, Increasing Output By 50%

ExxonMobil announced Tuesday that it had begun production at a third offshore drilling facility in Guyana's territorial waters, raising the country's oil output capacity from 400,000 to 620,000 barrels per day.

The Payara project is ExxonMobil's third floating production, storage and offloading (FPSO) vessel to reach operational status since 2019 in Guyana's offshore Stabroek Block. The development reached production stages earlier than anticipated; it was expected to begin drilling in the first half of 2024.

The company has also been awarded concessions for two additional projects in the offshore region north of Guyana, from which it expects to begin production in 2027—at that point, ExxonMobil projects a combined production capacity of over 1.2 million barrels per day. The company is also "working with the government of Guyana to secure regulatory approvals for a sixth project," the company said on Tuesday.

Guyana had a population of approximately 800,000 in 2021; only Qatar and Kuwait have ever reached the mark of producing 1 barrel of oil per citizen per day.

Guyana recorded zero oil production as recently as 2018, the final year before large-scale offshore oil mining began. Today the country is a top-25 global oil producer and "nearly 6,000 Guyanese" directly work in the oil industry, according to ExxonMobil.

Guyana recorded the world's largest year-over-year GDP growth in 2022, as measured by the IMF, due to increased oil output and economic activity associated with the oil sector. GDP per capita was approximately $19,000, according to the World Bank, outpacing regional economic powerhouses like Chile and Costa Rica.

The announcement of the Payara project's operational status pushes Guyana's oil industry closer to another milestone: eclipsing the daily production of its neighbor to the West, Venezuela, which produced an average of 780,000 barrels of oil per day in October.

The two countries remain at odds over a territorial dispute that has yet to be resolved by the International Court of Justice, which analysts say could pose a potential constraint to long-term growth in Guyana's oil sector.

ExxonMobil is the operator of projects in Guyana's Stabroek Block, with its Guyana-based subsidiary controlling 45% interest in the offshore oilfield. The remaining shareholders are Hess (35%), which was acquired by Chevron in late October, and China's CNOOC Petroleum (25%).

In September, Hess projected that a global oil price of $32 per barrel would be necessary for the Payara project to break even. Brent crude oil prices were approximately $82 per barrel on Tuesday, though that figure has fallen more than 10% from its 2023 peak.

Both Chevron and ExxonMobil have committed to achieving net-zero carbon emissions across their portfolios by 2050. Chevron's net income was over $35 billion in 2022; ExxonMobil's profit was over $55 billion.