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Key points
Oil from current and expected projects offshore Guyana and Suriname will grow to 1.6 MMbbl/d by 2030, based on modeled development timing, and result in associated gas production of ~3 Bcf/d.
Liza currently reinjects 96% of its total 150 MMcf/d of gas. Given the nascent domestic gas market, reinjection is expected to be the primary strategy for handling associated gas in Guyana’s oil projects. Assuming that level of reinjection is upheld in future phases, we estimate that ~120 MMcf/d of excess gas will need to be managed by the end of this decade.
Although flaring has historically been a common way to manage associated gas in frontier regions, it is not a long-term solution in this basin because of regulatory requirements and operators’ ESG commitments. (Our previous analysis of North American E&Ps revealed that investor interest in ESG is resulting in decreased emissions and flaring rates.) We expect this trend to continue, meaning operators XOM, HES, CNOOC, APA and TTE must develop alternatives to flaring to ensure their ability to produce oil in the region.
Compression equipment malfunctions have periodically interrupted gas injection from the Liza Destiny FPSO and restricted oil production by as much as 40%. Though these challenges are not expected to continue, they highlight the vulnerability of the region’s oil production to similar issues in the future.
