Guyana is all set to join the ranks of the world's major oil-based economies, as ExxonMobil charges forward on a project to capitalize on the largest oil find in over a decade.
Off the coast of the Petro Caribe member's shores, ExxonMobil discovered a massive oil field measuring about 6.6 million acres earlier this year, with reserves estimated up to 2 billion barrels.
Guyana's government approved the deal with the major United States oil company last week, and is now proceeding with the first phase of development to begin extracting and capitalizing the crude on the world market.
The US$4.4 billion project is expected to be finished by 2020, when it will begin producing around 120,000 barrels of oil per day.
“We will work closely with the Government, our co-venturers and the Guyanese people in developing this world-class resource that will have long-term and meaningful benefits for the country and its citizens,” the President of ExxonMobil Development Company, Liam Mallon said.
When ExxonMobil first announced the deal last week, the U.S. corporation's stock shares rose 0.7 percent nearly immediately. Exxon is also sharing its development with Hess, and CNOOC Nexen Petroleum.
The development is sure to initiate a profound transformation of Guyana's economy, catapulting it into the ranks of the world's major oil producing countries.
“It's not often that a country goes from 0 to 60 so fast like this. Guyana is rapidly joining the ranks of serious oil and gas players,” Matt Blomerth, head of Latin American Upstream Research for Wood Mackenzie said according to the New York Times.
When the oil reserves were first being prospected, the U.S. Department of State, curently headed by former ExxonMobil executive Rex Tillerson, began advising Guyana on how to “prepare" for an oil boom, giving advice on drafting new environmental policies and financial agreements.
Guyana's government plans to provide new aircraft and technology to its small military in order to increase border protection around the fields, providing "comfort to Exxon and other investors," the Presidential spokesperson said according to Associated Press.
Part of the oil field lies within the Essequibo region, which is claimed by Guyana's next door neighbor Venezuela as being within its territorial sovereignty in a decades long dispute.
Faced with aging oil reserves in the Middle East and political tensions with Russia, ExxonMobil has been working with heightened urgency to develop new sources like the one found in Guyana, and U.S. shale exploration, as well as assert its interests in major oil producing countries like Venezuela.
Venezuela is home to the largest oil reserves in the world, which were rapidly developed after fields were discovered there almost 100 years ago. As is common in countries with major oil reserves, the resource quickly came to dominate the economy as an export, consuming a 90 percent share of the total economy.