Exxon finalising relinquishment areas for Stabroek block – Routledge

…says company’s exit from Kaieteur Blocks is a work in progress

October 2024 has been earmarked as the time when ExxonMobil Guyana would relinquish 20 per cent of its holdings in the Stabroek Block. This is according to ExxonMobil Guyana President Alistair Routledge, who added that the oil giant is currently engaged in discussions with the Government in terms of finalizing which areas it will be giving up.
At a press conference held on Wednesday, Routledge was questioned about Exxon’s relinquishment of 20 per cent of its holdings in the Stabroek block, and he responded that the company is working along with the Ministry of Natural Resources and the Environment and with the Guyana Geology and Mines Commission (GGMC) to do just that.
“We’ve been working very closely with the Ministry of Natural Resources and (with the) GGMC to ensure the proper rules as part of the petroleum agreement are being followed; that we’re clear about what is the accessible acreage within the block, and what areas should be set aside; because they’re already on the production licence of the discovery area, and (they) define what is the area to be relinquished. I’d say we’re almost complete on that process, and I anticipate it will be completed very soon,” Routledge explained.
However, Routledge declined to comment on which areas the company is looking at relinquishing.
Meanwhile, the oil executive also spoke about the Kaieteur block, which the company was supposed to have exited and handed over to Ratio Guyana Limited.
At a press conference last month, Vice President Bharrat Jagdeo had said Government was awaiting information from Exxon in order to finalize their departure from Kaieteur. Routledge acknowledged that there is an ongoing exchange of information between Exxon and the Government, and said the company would look to supply the requested data as soon as possible.
“For the Kaieteur block, we addressed the data requests, the document requests, the Government had for us. Again, as with the work on the renewal of the prospecting licence for Stabroek, there are points where we receive more data requests or document requests, and we go back and forth,” he explained.
“And we plan to submit those (answers) as quickly and as timely as we can. Some of it requires us going to the other participants in that block, particularly Ratio, as they are coming in as the operator,” Routledge further explained.
It was announced last year that Exxon and Hess were both withdrawing from the Kaieteur block after years of fruitless exploration, which Exxon said had failed to meet its investment hurdle. The remaining partners: Ratio Guyana Limited, an Israeli-based energy company, and Cataleya Energy Limited, are likely to split ownership of the block 50/50, although there had been reports that Ratio was looking for new partners.
At the beginning of 2021, the oil block co-venturers had announced the Tanager-1 discovery in the Kaieteur Block offshore Guyana, with proven reserves of 65 million barrels of oil. In addition to Tanager-1, it was previously reported that there was the prospect of additional oil mapped across a 5750 square kilometre 3D seismic survey. It is located in the southern part of the Kaieteur Block, where the joint venture partners are grading the next potential targets for drilling.
Even though Exxon is in the process of withdrawing from Kaieteur Block, the company has attested that the block still has potential. Last year, Routledge had said that the company decided to exit the block based on pressing constraints; leaving the block was not a reflection of its value.
“Our decision there was that we were faced with a drill-or-drop decision on the farm-in we had with the other owners in the block; and as we looked at that decision and the timing in which we would have had to commit, it did not compete with the other decisions at a corporate level that we could see,” Routledge had explained.
The company has said that in leaving Kaieteur, which it said has been derisked, it plans to focus on accelerating development and production in the Stabroek Block, where Exxon is targeting six floating, production, storage and offloading vessels (FPSOs) by the end of 2027, bringing Guyana’s production capacity to more than one million barrels per day.
With ExxonMobil as the operator, Guyana began producing oil on December 20, 2019 in the oil-rich Stabroek Block, which is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), holds 45 per cent interest in that block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.