Spotlight on Guyana
July 14, 2023
Guyana, a country of less than one million people, is poised to be the world’s fourth largest offshore oil producer, placing it ahead of the US, Qatar, Mexico, and Norway. A consortium led by ExxonMobil discovered the first major oil deposits in 2015, more than 100 miles offshore of Guyana. Crude exports from Guyana nearly tripled in 2022, driven by rising production (poised to reach 1.4 million b/d by 2030) and solid demand from Europe in the aftermath of the Ukraine invasion. There are two FPSOs currently producing – FPSO Liza Unity and Liza Destiny – with the newly delivered FPSO Prosperity expected to supply crude to the market in Q4 2023.
Figure 1: Guyana Crude Oil Production Figure 2: Guyana Exports by Destinations 2021-2023Jun
Source: Refinitiv Eikon, IEA Source: McQuilling Services
​According to McQuilling tracked fixtures, the most popular route since the beginning of 2021 has been short haul trades to Chiriquí Grande, where crude volume further transferred through the Trans-Panama pipeline and picked up by (potentially) VLCCs to the Eastern destinations. The second most popular trade was to Northern Europe to replace Russian barrels in the refining system. These trades have predominantly been carried out on Suezmaxes, with some of the flow to Northern Europe carried out on VLCCs amid the advantage on freight costs. Considering the crude grade (light sweet with 32.1 API gravity) being well-adapted in Europe and Asian refineries, we believe Suezmax tankers will continue to benefit from the rapid development on Guyana offshore field. Depending on the freight structure, charterers could also find VLCCs to be more attractive for short-haul destinations to Europe, or even long-haul direct discharge to the Far East via Cape of Good Hope.
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