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Weekly Report - 23 April 2020 (WR-20-16)

Guyana’s oil attracts strong interest despite price collapse

An unprecedented slump in oil prices, which tipped into negative territory for the first time in history on 20 April in the US over storage concerns, poses a huge challenge to Latin America’s oil-producing nations, especially Venezuela and Ecuador, as well as Colombia. It is also a serious blow to Mexico’s debt-ravaged state oil company Pemex, although, along with Brazil, Mexico is in a stronger position to weather price volatility in the short-term as it is far less reliant on oil revenue to balance its budget. In a sign of confidence in a swift recovery in demand after the worst of the coronavirus (Covid-19) pandemic is over, however, just the day after the oil price plunge, significant interest was registered in a contract to market the Guyanese government’s share of crude extracted from its massive Stabroek offshore oil block.

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