Guyana’s record-breaking oil boom

Credit: OILPRICE.com

The tiny South American nation of Guyana, once among the continent’s poorest countries, has rapidly emerged as a major oil producer. Following a series of high-quality discoveries in the offshore Stabroek Block, the government in Georgetown is now managing one of the world’s largest oil booms. In roughly a decade, Guyana went from its first oil discovery to becoming South America’s third-largest oil producer, with further growth expected. This has delivered a massive economic boost to the country of fewer than one million people, now ranked among the wealthiest in South America.
At the heart of Guyana’s booming hydrocarbon sector is the 6.6-million-acre Stabroek Block. ExxonMobil, the operator with a 45 per cent stake, alongside partners Chevron (30 per cent) and CNOOC (25 per cent), made the first major offshore discovery there in 2015. This was followed by a series of commercially viable finds, collectively estimated to hold around 11 billion barrels of recoverable resources. The crude is light and sweet, with an API gravity of 31.9 degrees and 0.59 per cent sulfur, making it attractive in a lower-emissions market.
Remarkably, Guyana went from the Liza-1 discovery to first oil in just four years—a rapid timeline for an industry in which major offshore projects often take a decade or more to develop. By comparison, neighbouring Suriname’s Block 58 discovery in 2020 will not begin production until 2028 due to more complex geology.
Development in the Stabroek Block continues at a rapid pace. By August 2025, Exxon had brought its fourth project, Yellowtail, online through the ONE GUYANA FPSO, which has a capacity of 250,000 barrels per day. By November 2025, Yellowtail had reached full output, helping push Guyana’s total production to 900,000 barrels per day, all from Stabroek. This milestone solidified Guyana as South America’s third-largest oil producer, behind only Brazil and Venezuela.
In just ten years, Guyana has gone from zero oil production to nearly one million barrels per day, surpassing Ecuador, Colombia, and Argentina. Production is expected to keep rising as Exxon develops four additional projects with a combined capacity of 940,000 barrels per day, potentially lifting Guyana’s output to 1.7 million barrels per day by 2030—enough to make it South America’s second-largest producer.
Chevron, which holds a 30 per cent stake acquired through its purchase of Hess, recently suggested the Stabroek Block may hold more than the estimated 11 billion barrels. Exxon continues to expand exploration and appraisal drilling, starting the Hamlet-1 prospect and the Lukanani-2 appraisal well in 2025.
The consortium enjoys highly favourable terms under Guyana’s original production sharing agreement (PSA), considered among the most lopsided globally. The deal included a two per cent royalty applied only to cost oil, with 75 per cent of all oil classified as cost oil—meaning that revenue overwhelmingly returned to the consortium. Only 25 per cent of petroleum revenue counted as profit oil, shared equally with the government.
Guyana offered such generous terms because six decades of offshore exploration had produced no commercially viable discoveries, despite estimates suggesting the basin held up to 32.6 billion barrels. The favourable PSA attracted major companies to take the risk of drilling in underexplored waters.
In response to global criticism, Georgetown has since revised its contracts to secure a larger share of profits. Key changes include reducing cost oil to 65 per cent, increasing royalties to 10 per cent, and introducing a 10 per cent corporate tax. No future contracts will receive the highly beneficial terms granted for Stabroek, which remains extremely profitable due to its low average breakeven price of US$30 per barrel—one of the lowest in South America. (OILPRICE.com)