Jan 15, 2026
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Boston, Massachusetts-Recent commentary suggesting that Guyana’s flagship offshore oil projects are “on track to dry up” within a few years reflects a fundamental misunderstanding—not of Guyana’s geology, but of how oil fields are engineered, modeled, and managed. The production profiles for Liza Phase 1, Liza Phase 2, and Payara, when read properly, tell a far more sober and instructive story.
The chart accompanying this article, titled Production Profile for Liza 1, Liza 2, and Payara, presents projected production in thousands of barrels per day from 2019 through mid-century. It is not a warning sign. It is a textbook illustration of managed offshore reservoir development governed by well-established decline dynamics. To understand why, one must first understand the theory behind decline curves.
At a fundamental level, decline curves are empirical tools developed in petroleum engineering to describe how oil and gas production changes over time once a field is brought on stream. First formalized by J.J. Arps in 1945 [1], decline curve analysis begins with a simple physical reality: as hydrocarbons are produced, reservoir pressure declines, flow resistance increases, and production rates naturally fall. Rather than assuming constant output until sudden exhaustion, decline curves model this process mathematically using exponential, hyperbolic, or harmonic functions, each corresponding to different reservoir behaviors.
Arps’ work established three fundamental types of decline based on empirical observations of field behavior. Exponential decline assumes a constant fractional rate of decline, appropriate for reservoirs operating under boundary-dominated flow with constant pressure conditions. Hyperbolic decline, characterized by a decline exponent between 0 and 1, captures the more gradual flattening of production rates observed in many reservoirs as they mature. Harmonic decline represents the limiting case where the decline exponent equals 1, often observed in naturally fractured reservoirs or under certain drive mechanisms [2]. Modern applications extend Arps’ framework considerably. Fetkovich (1980) integrated decline curve analysis with the type curves derived from transient flow theory, providing a more rigorous physical basis for matching field performance[3]. Robertson (1988) addressed the tendency of hyperbolic decline to overestimate long-term reserves when applied mechanically, proposing methods to constrain tail production using physical limits[4]. More recently, Valko and Lee (2010) developed probabilistic decline curve methods that account for uncertainty in both historical data and future performance[5].
Crucially, the purpose of decline curves is not to predict when oil “runs out.” Their purpose is to forecast future production rates, estimate cumulative recovery, and determine the field’s economic life under specific operating assumptions. In practice, decline curves are updated continuously as new production data becomes available, making them adaptive forecasting tools rather than fixed predictions. Properly applied, they replace simplistic arithmetic with physics-informed expectations about how production evolves gradually over decades, not abruptly over years.
With that framework in place, the Liza and Payara curves can be read correctly. The production profiles for these three projects share a common and deliberate structure that begins with a ramp-up phase. Production rises rapidly as wells are sequentially brought online and FPSO facilities reach safe operating limits as established by the governing EIA. Liza Phase 2, in particular, climbs quickly into the 220–250 thousand barrels per day range. This is not evidence of reckless extraction. It reflects standard offshore project economics: early production is accelerated to recover capital costs and stabilize operations.
Following this initial surge comes the peak or short plateau, roughly between 2024 and 2026. This point is frequently misinterpreted in public discourse. The peak does not signal that the reservoir is “running out.” Instead, it marks the transition from facility-constrained to reservoir-controlled production, in which flow behavior is governed by pressure management rather than surface capacity. What follows is the managed decline phase. Here, the curves slope downward smoothly, not precipitously. This portion of the chart closely resembles hyperbolic decline behavior—steeper declines early on that gradually flatten over time. This is exactly what one expects from offshore reservoirs supported by water injection, gas handling, and disciplined well management.
The curves then extend into a long tail of lower production. By the late 2030s and 2040s, output levels fall into the 30–50 thousand-barrel-per-day range and persist well beyond 2050. This long tail is often overlooked, yet it can account for a substantial share of total recoverable reserves over a field’s life. Fields rarely stop producing because oil disappears; they stop when production becomes uneconomic. At no point do the curves collapse. At no point do they approach zero abruptly.
Claims that Liza One or Liza Two will “dry up” within two or three years rely on a simplistic calculation: remaining barrels divided by current daily production. This approach assumes constant production indefinitely, ignoring decline dynamics altogether. The chart itself refutes that assumption. Production is designed to decline. It always has been. The relevant question is not when oil physically disappears, but when continued production no longer makes economic sense. Those are very different endpoints, governed by price, costs, and policy—not by arithmetic. The curves show decades of continued production, albeit at diminishing rates. That is not depletion. It is planned maturation.
Reading these curves correctly does not invite complacency. It demands seriousness. They tell us that peak oil revenue is temporary, that decline is predictable, and that Guyana has a finite window in which to convert petroleum wealth into durable national capacity. That means disciplined management of the Natural Resource Fund, sustained investment in education and infrastructure, and a deliberate strategy for economic diversification beyond oil. The danger is not that the oil will suddenly vanish. The danger is mistaking early abundance for permanence.
The production profiles for Liza Phase 1, Liza Phase 2, and Payara do not show fields on the verge of drying up. They show competently engineered offshore projects following well-understood decline curve dynamics. Misreading these curves leads to alarmism, poor journalism, and bad policy. Reading them correctly buys something invaluable: time—time to plan wisely, time to invest strategically, and time to build an economy that endures beyond the oil.
References
[1] Arps, J.J. (1945). “Analysis of Decline Curves.” Transactions of the AIME, 160(01), 228-247.
[2] Arps, J.J. (1945). “Analysis of Decline Curves.” Transactions of the AIME, 160(01), 228-247. See also: Fetkovich, M.J., Vienot, M.E., Bradley, M.D., and Kiesow, U.G. (1987). “Decline Curve Analysis Using Type Curves—Case Histories.” SPE Formation Evaluation, 2(04), 637-656.
[3] Fetkovich, M.J. (1980). “Decline Curve Analysis Using Type Curves.” Journal of Petroleum Technology, 32(06), 1065-1077.
[4] Robertson, S. (1988). “Generalized Hyperbolic Equation.” Presented at the SPE Annual Technical Conference and Exhibition, Houston, Texas, October 2-5. SPE-18731-MS.
[5] Valko, P.P., and Lee, W.J. (2010). “A Better Way to Forecast Production from Unconventional Gas Wells.” SPE Annual Technical Conference and Exhibition, Florence, Italy, September 19-22. SPE-134231-MS.
Editor’s Note
Recent public discussion about Guyana’s offshore oil fields has included claims that misinterpret standard petroleum engineering concepts, particularly around production decline and depletion. This article is intended to clarify how decline curves are actually read and used by engineers and policymakers, using the publicly available production profiles for Liza Phase 1, Liza Phase 2, and Payara. The goal is not advocacy, but accuracy—so that national conversations about oil, revenue, and long-term planning are grounded in sound technical understanding rather than misleading arithmetic.
— Guyana Business Journal
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