According to estimates released on Friday by consultancy Rystad Energy, the world’s oil and gas explorers hit black gold, discovering some 12.2 billion barrels of oil equivalent (boe) in 2019, the highest volume since 2015. The year 2019 recorded 26 discoveries of more than 100 million boe, with offshore regions dominating the list of new oil and gas deposits.
The increased oil and gas finds last year is largely attributed to US oil major Exxon Mobil’s Guyana’s plays. Last year, ExxonMobil added four new discoveries within Guyana’s offshore Stabroek block. Rystad Energy estimates that the discoveries in Guyana hold cumulative recoverable resources of around 1.8 billion boe.
“ExxonMobil can be declared explorer of the year for a second year in a row thanks to its ongoing efforts and results in Guyana, along with significant investments in Cyprus. The supermajor was exceptional, both in terms of discovered volumes and value creation from exploration,” said Palzor Shenga, a senior analyst on Rystad Energy’s upstream team.
ExxonMobil discovered around 1.07 billion boe in additional net resources last year. Rystad Energy estimates the value creation from these volumes to be around $2.7 billion, largely driven by continued success in Guyana.
If the mention of Guyana has you wondering where it is and what’s going on there. The country is located on South America’s North Atlantic coast with a population of just under eight million people, according to 2017 World Bank estimates.
It is the only English-speaking country in South America. Since Guyana gained its independence in 1966 from the UK, the country’s chief economic assets have been its natural resources, mainly its pristine rainforests, sugarcane plantations, rice fields, and bauxite and gold reserves.
ExxonMobil’s hydrocarbon finds should be good news for the country, one of South America’s poorest, however, the country has to avoid the danger that countless other poor countries have fallen to known as the “oil or resource curse,” also known as the paradox of plenty. This refers to the paradox that countries with an abundance of natural resources (such as fossil fuels and certain minerals), tend to have less economic growth, less democracy, and worse development outcomes than countries with fewer natural resources.
Countries that beat the resource curse include Canada, Chile, Norway, and Bostwana. But there are a plethora of others that fell victim to the resource curse, including OPEC members Algeria, Iran, Kuwait, Nigeria, Qatar (now a former OPEC member), Saudi Arabia, United Arab Emirates and Venezuela.
Off the coast of Mauritania, British Petroleum’s (BP’s) Orca gas field was not only the largest single discovery, according to Rystad, but also the deepest-water find of 2019, estimated to hold about 1.3 billion boe of recoverable resources. Recent gas discoveries in the region now support plans to build an additional liquified natural gas (LNG) hub in the Bir Allah area in Mauritania.
In Russia, state-run Gazprom announced two discoveries in the Kara Sea, Dinkov in the Rusanovsky block and Nyarmeyskoye in the Nyarmeysky block. Rystad Energy estimates Gazprom’s 2019 discoveries to hold combined recoverable resources of around 1.5 billion boe, with Dinkov ranked as the second-largest find in 2019 world-wide.
There were other notable offshore discoveries in 2019, including French oil major Total SA’s Brulpadda in South Africa, ExxonMobil’s Glaucus in Cyprus, Chinese state-run oil and gas major China National Offshore Oil Corporation (CNOOC’s) Glengorm in the UK and Equinor’s Sputnik in the Norwegian sector of the Barents Sea.
While Rystad’s release may be good news for a world that will still need hydrocarbons for decades to come to support economic growth, it must hit in the pit of the stomach for environmentalists that believe the world should somehow automatically stop using oil and gas and turn to renewables, though that possibility is still many years in the making.