Russias war on Ukraine has exposed the cracks in western energy security. Russias gas deliveries to Europe have plummeted by 80 percent from their level before the invasion. One result: the U.S. is dealing with high prices and limited supplies of energy, creating one of the worst energy supply shortfalls in nearly five decades. But one little-known country in South America might provide the antidote to the Wests energy woes: Guyana.
Guyana is a small nation on the Atlantic coast of South America wedged between Brazil, Venezuela, and Suriname. Some Americans might recall the tragic 1978 shooting death there of U.S. Rep. Leo Ryan (D-Calif.). But today, the country is poised to become a major power in the global oil and gas market, potentially freeing western countries of their dependence on OPEC and Russian oil.
Guyana has quickly become the fastest growing crude-oil producer in the world. Commercial oil production in Guyana started in 2019 after major offshore fields were discovered in 2015. Since then, Guyanese oil has made up one-third of the crude oil discovered in the world, with more than 11 billion barrels of recoverable gas and oil found by an Exxon Mobil-led consortium.
Guyanas future is bright. Just last year, Guyanas oil exports jumped 164 percent as global powers turned away from Russian energy. The International Energy Agency predicts Guyanas oil production will reach or surpass 1.4 million barrels a day by 2030. A study by Rystad Energy, an energy intelligence group, predicts that Guyanese oil production will increase at such a rapid pace that it will surpass levels in other large offshore basins, including Norway, the U.S., and Mexico by 2035 to become the worlds fourth-largest offshore producer.
To western countries, Guyana offers a friendlier face to turn to than other major oil exporting countries. Guyana is English-speaking. It is among the top five non-OPEC energy producers in the world. The nation, therefore, is a way for the West to find enough supply while minimizing exports from sometimes problematic countries in the Middle East and, of course, Russia.
Guyana is a parliamentary democracy that has had good relations with the U.S. since the early 1990s. Then, the government embraced a free-market economy and open elections. As Guyana has become an oil-producing powerhouse, trade with the U.S. and Europe has significantly increased. For years, Guyana was one of the smallest and least developed nations in South America. Now, it is using its oil wealth to industrialize and democratize further. It boasts a gas-fired power plant, new roads, and a slew of solar energy projects.
Because it has come late to energy production, Guyana has taken advantage of state-of-the-art technology and infrastructure. It also is part of the global shift toward clean-energy production. According to the Rystad Energy report, The emissions intensity of Guyanese production is only half the global average. Those emissions are expected to decline even further in the years to come. This is due in large part to the Exxon Mobil-led consortiums use of state-of-the-art floating production storage and offloading vessels.
As the globe emerges from the COVID-19 pandemic and grapples with the fallout of Russias war in Ukraine, demand for oil and gas is historically high. World oil demand will increase by two million barrels a day in 2023 to a record 101.9 million barrels a day, even as a worldwide push toward renewable energy grows stronger. At the same time, oil-production cuts by OPEC will push supply down by 400,000 barrels a day by the end of 2023. The global energy supply increasingly must rely on non-OPEC oil producing countries to keep up with rising energy demand. Guyana offers safe harbor in stormy seas for an oil-and gas-dependent world.