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Striking Oil Ain’t What It Used to Be

1 23 0
20.01.2020

On January 7, the oil and gas companies Apache Corporation and Total SA announced a major oil find off the coast of Suriname, not far from enormous offshore deposits in neighboring Guyana discovered by ExxonMobil last year. The size of the Suriname discovery is yet to be determined, but it could be large enough to transform the small South American country, where per capita income is less than $6,000. Just three months prior on the other side of the Atlantic, the British oil major BP announced the largest natural gas discovery of 2019: the energy equivalent of 1.3 billion barrels of oil lies waiting to be extracted off the coast of Mauritania, more than enough to support a liquefied natural gas (LNG) hub. And the same year in Mozambique, Total acquired a $3.9 billion stake in an LNG project whose total cost will likely dwarf that country’s national economy.

At a time when many countries are finally trying to reduce their reliance on fossil fuels, the world is suddenly awash in oil and gas discoveries. But for the countries with the newest finds, many of them in Africa and South America, mineral wealth may not be the bonanza it was in decades past. Large oil and gas companies see long-term prices trending downward. As a result, they are investing in fields that can be brought into production quickly instead of developing expensive, far-flung reserves. Global natural gas markets, in particular, face a huge glut of resources and projects that must compete against the falling price of renewable energy technologies. As a result, Suriname, Guyana, Mauritania, Mozambique, and a handful of other developing countries with recent fossil fuel finds are in a desperate race against time.

The party hasn’t ended yet, but for the world’s newest petrostates it may be last call. To preempt........

© Foreign Affairs