ExxonMobil Strikes More Oil Offshore Guyana

ExxonMobil Corp. (NYSE: XOM) has chalked up another win offshore Guyana where its latest Payara well has hit oil, bringing the estimated gross recoverable resources for the Stabroek Block up to as much as 2.75 billion barrels of oil equivalent (Bboe).

“Payara-2 confirms the second giant field discovered in Guyana,” Steve Greenlee, president of ExxonMobil Exploration Co., said in a July 25 company statement. “Payara, Liza and the adjacent satellite discoveries at Snoek and Liza Deep will provide the foundation for world class oil developments and deliver substantial benefits to Guyana. We are committed to continue to evaluate the full potential of the Stabroek Block.”

The success story unfolding offshore Guyana has been a positive for oil and gas exploration, an area that saw deep spending cuts in recent years as the downturn bit into profits and prompted companies to pause high-dollar drilling plans. But some projects, those believed to have the greatest potential, survived, and the effort is paying off for ExxonMobil and its partners offshore Guyana.

Drilled to a depth of 5,812 m (19,068 ft) in about 2,135 m (7,000 ft) of water the Payara-2 well hit 18 m (59 ft) of oil-bearing sandstone described by ExxonMobil as being high quality. The well was drilled by Esso Exploration and Production Guyana Ltd., an ExxonMobil affiliate.

The discovery boosts the Payara resource estimates to about 500 million barrels of oil equivalent (MMboe) , while increasing the estimated gross recoverable resource for the 26,800-sq-km Stabroek Block—where the offshore Guyana discoveries are located—to between 2.25 Bboe and 2.75 Bboe. The latest well is located 20 km (12 miles) northwest of Phase 1 of the play-opening Liza oil discovery.

The Payara-2 discovery comes just over a month after ExxonMobil made a final investment decision to proceed with the Liza oil discovery, which is expected to initially produce up to 120,000 barrels per day. Production is expected to start by 2020.

As part of the more than $4.4 billion Phase 1 project, the company said it will use a subsea production system and an FPSO vessel to develop about 450 MMbbl of oil. SBM Offshore landed the contract to construct, install, lease and operate the converted very large crude carrier FPSO unit that will be spread moored in a water depth of 1,525 m (5,003 ft). Development plans also include four drill centers with eight production wells, six water injection wells and three gas injection wells.

Esso E&P Guyana Ltd. is the operator with a 45% interest in the block. Hess Guyana Exploration Ltd. holds a 30% interest, while CNOOC Nexen Petroleum Guyana Ltd. has 25%.

Velda Addison can be reached at vaddison@hartenergy.com.