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Guyana sees first offshore oil production

The vast oil reserves offshore of Guyana were first found in 2015, but December 20 marked a historic milestone as ExxonMobil started production from the Liza Destiny floating production storage and offloading (FPSO) vessel in the country’s offshore waters.

By 2025, ExxonMobil, the energy giant behind Mobil lubricants like hydraulic oil, expects to have five FPSOs operating in Guyana’s Stabroek block, with production in excess of 750,000 barrels per day.

Guyana’s move towards becoming an oil-producing nation should bring new economic opportunities to the South American country, which has historically been relatively poor. Furthermore, with a population of under a million, Guyana may become the biggest producer of oil per capita in the world. To mark the occasion, David Granger, Guyana’s president, has designated December 20 as National Petroleum Day.

The windfall from oil production will naturally bring the responsibility to spend it appropriately. In a video address to the Guyanese, President Granger said:

“I assure you that your government will manage petroleum revenues prudently to ensure fiscal discipline, financial sector stability, sustainable levels of public debt and low inflation.”

The government has already set up a sovereign wealth fund to invest some of the proceeds from oil production, but it still needs to formulate a firm plan for how oil revenues will be distributed and embody it in laws and regulations.

ExxonMobil is the largest partner in the Guyana project with a 45% share. The other partners are the Chinese CNOOC Ltd. (with 25%) and Hess Corp. (30%).

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