Camila Fontana: Hello everyone, welcome to Market Talks, the weekly Argus podcast on the commodities and energy sectors. I am Camila Fontana, deputy bureau chief of the Argus office in Brazil and it is once again my pleasure to welcome João Scheller, who covers crude markets in Colombia, Ecuador, Argentina, and Guyana, which is the focus of our conversation today.
João, Guyana quickly moved from zero output to becoming one of the fastest growing producers of crude in the world. How did that happen?
João Scheller: Well, first of all, thank you, Camila, for having me here once again. Guyana has a very interesting story.
We had a giant discovery of crude oil in 2015 in Guyana led by a consortium which is basically consisted by ExxonMobil, Hess, which is an American independent company and China's state-owned CNOOC. In in 2015, as I said, there was a giant discovery of a block, just call it Stabroek block, which is about 120 miles off the coast of Guyana.
That is about 200km distant from there. It is very similar to what we have, for example, in Brazil with the crude production being concentrated offshore. And the discovery was made in 2015, and the country started to produce crude oil and started to export crude oil in 2019. That was very quick, very interesting and probably definitely an unusual fast development of the crude oil market in in Guyana.
We have these three companies. As I mentioned, Exxon, Hass and CNOOC. But we also have a part of the crude oil produced in Guyana being marketed on behalf of the Guyanese government. We have what we call equity barrels as well. We have basically that set in in Guyana. That is how they started to produce crude oil there.
CF: And what are the main characteristics of the crude produced Guyana and how do these characteristics affect its market value?
JS: Right. The crude oil produced in Guyana is what we call a medium-sweet crude oil. That means that it is low in sulphur content, but it has an API between 30 to 35 in Guyana specifically it is between 29 to 34. That is what we call a medium-sweet oil which means that it is relatively easy to refine. I am not going to get into the details of the refining process, but it is relatively easy to refine.
We have three different types of crude in Guyana. One is Lisa, then we have Unity Gold and Payara Gold. We have by the way Argus assess daily each of those crudes since early 2024 and the main markets we have for those crudes are Europe first about 50pc of the exports of Guyanese crude head to Europe. And then we have another 30pc around that that head to the US.
Mostly to the West Coast, but more recently we have seen more and more Guyanese crude cargoes heading to the Gulf Coast as well. Of course, those numbers vary, and they vary month to month. That is just an estimate, but we have definitely Europe as the Guyanese main market. And that is mostly because of the of the compatibility with European refineries basically. We can say that Guyanese cruise is well-valued in international markets. And it competes directly with other crudes with similar quality.
We can mention West African crude in general have a few different crude grades that compete with Guyanese crude; Libyan crude; and also, Brazilian crude grades such as Mero and Buzios. Also, Argus also assesses Buzios on a delivery basis to Europe and also a wide range of West African and Libyan grades. There is an easy way to compare and see the perspective of the competition in the European market for those rates.
CF: And João, going forward, what is the outlook for Guyana's crude production over the next few years?
JS: Well, the output is projected to reach up to 1.3 million b/d by 2030. That is a lot of crude. Of course, that depends on a lot of factors and a lot of projects being finished and being developed.
As of now, Guyana has a crude production in 2024 of about 650,000 b/d. And by the end of this year, we expect Guyana to reach a crude production of about 674,000 b/d. We do have a little increase in crude production. In 2026, this number could grow even further because later in this year, we are going to start to have a new project, a new crude being produced in Guyana. It is going to be the fourth crude grade produced in Guyana. It is called the Golden Arrowhead, and it will come out from the Yellowtail project which is set to begin production in August this year.
As we are recording this podcast, it is within a month from now, right? And well, they already started to organize the exports of this crude grade specifically. And what is interesting about this new Golden Arrowhead crude is that it will be the first light sweet Guyanese crude grade.
It has an API gravity of about 36 and sulphur content of 0.25pc. Of course, as the project develops, we are going to see more information about this crude being published, but as of now it is going to be the first light sweet crude rate from Guyana.
And this project specifically, so this FPSO that will produce this new crude is set to reach an output of 250,000 b/d by early next year. So perhaps and there is a very high chance that we are going to see an impact of this new project in Guyana's crude production next year.
CF: Fast growth indeed. Thank you again João for being here with us. Thank you to our listeners.
Stay tuned for more Argus content on the commodity and energy sectors in Latin America and elsewhere. All episodes are on major streaming platforms. Hope to see you next time. Bye-bye.
JS: Thank you.
