ExxonMobil makes sixth oil discovery off Guyana

Market: Crude oil
10/01/18

ExxonMobil has made a sixth oil discovery on Guyana's deepwater Stabroek block, expanding recoverable resources from the acreage to more than 3.2bn bl of oil equivalent (boe), the company said.

The latest find was made in the Ranger-1 well that was spudded on 5 November 2017, and which "encountered around 230ft (70m) of high-quality, oil-bearing carbonate reservoir," ExxonMobil said.

The well was drilled to 21,161ft in 8,973ft of water.

ExxonMobil operates 6.6mn acre (26,800km2) Stabroek with a 45pc stake. US independent Hess holds 30pc, and the remaining 25pc belongs to Chinese state-owned CNOOC unit Nexen.

ExxonMobil's string of successful wells in Guyana started in May 2015, when it discovered more than 1bn bl of oil equivalent, featuring 32°API crude, at its Liza-1 well on Stabroek about 130mi offshore.

Guyana currently produces no hydrocarbons, and imports refined products from Trinidad and Tobago and the US to meet demand of about 12,800 b/d.

ExxonMobil will start production from its Stabroek wells in March 2020, the company's Guyana country manager Rod Henson said on 28 December 2017, adding that initial output will represent "only a fraction" of the the block's potential.

"It will be somewhere between 100,000 b/d and 120,000 b/d, and we will continue to try to accelerate on that."

Guyana anticipates offshore oil production of about 320,000 b/d by 2025, government officials in the sparsely populated South American country told Argus in October 2017.

"The Ranger-1 well discovery adds to previous world-class discoveries at Liza, Payara, Snoek, Liza Deep and Turbot, which are estimated to total more than 3.2bn recoverable oil-equivalent barrels" ExxonMobil said.

Ranger-1 was worked by the Stena Carron drillship that is moving to the Pacora prospect near the Payara discovery, the company said.

"Additional exploration drilling is planned on the Stabroek block for 2018, including potential appraisal drilling at the Ranger discovery."

Oil that will be produced in Guyana will be exported as the country has no refineries. The country is still considering whether it will ask ExxonMobil to refine the country's portion that will be 14,000 b/d at the start of production, or accept a proposal from Trinidad's state-run oil company Petrotrin that operates a 168,000 b/d refinery, Guyana's natural resources minister Raphael Trottman said in 29 December.

Guyana's offshore acreage is part of the Guyana-Suriname basin that the US Geological Survey says contains an estimated 13.6bn bl of oil and 32 Tcf of gas yet to be discovered.

ExxonMobil's discoveries have significantly de-risked the Guyana-Suriname basin attracting several other companies including Chevron, Total, Repsol and Germany's DEA.

But offshore Guyana exploration remains under the shadow of a longstanding territorial dispute with Venezuela that has claimed sovereignty over the resource-rich Essequibo province that makes up the western two thirds of Guyana. The dispute has prevented the countries from demarcating their maritime boundary.

Caracas has previously expressed its opposition to the Stabroek activity, but has been quiet for at least a year as it focuses on quelling internal strife.

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