Guyana’s Oil and Gas Sector: Happenstance as a foundational dynamic
Introduction
This week’s column continues to advance the discussion concerning the analytical significance of Pillar A that I started last week. To recall briefly, Pillar A has been represented as one of four analytical pillars [A-D] that will be used in this series of columns to construct a general hypothesis or theoretical formulation, which I shall argue best explains the ruling dynamic governing what I label as the first phase of Guyana’s long-term evolution of today’s rapid emergence of its oil and gas sector. That is a decade or so. Further, Pillar A as an integral element of my main thesis should therefore be viewed as foundational to the logical construction and/or understanding of a broader political economy of contemporary Guyana.
Perhaps, more specifically, today’s column will focus on three main tasks. First, I continue to narrate the details related to the “how and why” of Guyana’s recent world class petroleum finds or discoveries. Second, I repeat the details behind the two principal reasonings, which have informed my very early public prediction of the likelihood of these forthcoming discoveries. Thirdly, I shall briefly refer to the notion of happenstance. As I proceed, the notion of happenstance will be further developed. Indeed, it is a cornerstone of the general hypothesis or explanation for Guyana’s stunning discoveries. As a consequence, the notion of happenstance will be continually developed as I demonstrate the importance of Pillar A as a theoretical foundation.
In the next section I offer a succinct re-statement of the first of the two reasonings indicated last week, which lie behind my bullish and confident prediction of Guyana’s potential recoverable petroleum resources; namely, the Atlantic Mirror Image Theory.
Atlantic Mirror Image Theory
The literature reveals that several geoscientists have long posited the view that Guyana’s petroleum potential stems from the earlier drifting apart of an originally unified super-continent, combining South America and Africa. Separation lasted over geological time, resulting in the Guianas Equatorial Margin (encompassing offshore and onshore portions of Guyana, Suriname, French Guiana, and limited portions of Venezuela and Brazil). The petroleum geology of the Guianas area mirrors West Africa. As such it includes two sedimentary basins; the Guyana-Suriname Basin and the Foz do Amazonas Basin. Further the Guianas Equatorial Margin/Guianas Basin is separated by the Demerara Plateau, which is a structurally high, thick succession of Jurassic and Lower Cretaceous carbonate-rich sediments.
These circumstances yield the thesis that the petroleum geology of the Guianas Basin is a “mirror-image” of West Africa’s, where large hydrocarbon accumulations have already been found, including, the famed Jubilee discovery, offshore Ghana.
USGS Assessments
The second reason in support of my contention that about 13 to 15 billion barrels of crude oil and 23 to 43 billion cubic feet of natural gas and natural gas liquids represent Guyana’s “massive world class petroleum resource potential” is based on two Fact Sheets put out by the United States Geological Services, USGS, `World Energy Assessments of Undiscovered Oil and Gas Resources for the Region: Central and South America and the Caribbean (2000 and 2012)’. The data provided are “fully risked”. Further, the estimates are provided at levels of 95, 50, and 5 per cent probability. The mean probability is also reported (where fractiles are additive, assuming perfect positive correlation). In addition, the estimates provided for natural gas include natural gas liquids separately. “Undiscovered” gas resources, as provided by the USGS, are the sum of non-associated and associated gas. Results from the two Surveys are summarized and presented in Table 1 below.
For the 2000 assessment, estimates range from 2.8 billion barrels of oil (at 95 per cent likelihood) to 32.6 billion barrels (at 5 per cent likelihood). The 50 per cent likelihood is 13.9 billion barrels of oil equivalent [BoE] and the mean is 15.2 billion BoE. For the 2012 assessment estimates range from 5.2 billion barrels at 95 per cent and 26.0 billion barrels at 5 per cent. The 50 per cent likelihood is 12.5 billion barrels and the mean is 13.6 billion barrels. Discoveries thus far by ExxonMobil and partners reveal amounts considerably larger (10+ billion BoE) than the 95 percent likelihood estimate for both assessments.
Two further observations are warranted at this point. First, these estimates are for a virgin frontier region and therefore remain reliant on detailed petroleum geology assessments to verify. Second, the mean natural gas estimates are for 42.1 and 21.2 billion cubic feet, respectively. And, for natural gas liquids the mean probability is 2.3 and 0.1 million barrels, respectively.
It should be recalled that these survey assessments were conducted as a subset of the USGS’ World Assessments. Further, the natural gas estimates are reported in cubic feet and natural gas liquids in BoE. The standard conversion ratio of natural gas to BoE is 6,000 cubic feet of natural gas is equivalent to one BoE.
Conclusion
In conclusion, I hasten to assure readers that my predictions were first made as far back as October 2-9, 2016. These predictions were later repeated in my column series entitled, Guyana Petroleum Road Map on (February 10 – 17, 2019).
Next week’s column will develop further the treatment of happenstance as an explanatory factor in Guyana’s petroleum development