Exxon mulling carbon capture options in S8 block – Routledge

…negotiating mutually-satisfactory deal

Oil giant ExxonMobil remains very much interested in the S8 block it won in the 2022 bid round, with ExxonMobil Guyana Limited (EMGL) President Alistair Routledge revealing the company is looking at the possibility of not only oil production, but also using the block for carbon capture.
Following the 2022 oil auction bid round where EMGL was one of the companies that won a shallow block, there has been a delay when it comes to reaching an agreement. Exxon was not among the companies that had accepted agreements for their blocks last year, nor was it among the companies Government had recently confirmed would be signing agreements this year.
During a recent press conference, Routledge confirmed that his company was still very much interested in the block it won. He acknowledged that the process has taken some time, but noted that Exxon is focused on ensuring it negotiated a mutually-satisfactory deal with the Government of Guyana.

“We’re very interested in the block and that’s why we continue to have our discussions with the Government. We wouldn’t do that if we weren’t committed to trying to finalise a good agreement that works for the country and works for us,” the oil executive said.
There had been speculation that Exxon and the Government were in disagreement over using the block for carbon capture and storage, which is the process of capturing carbon dioxide (CO2) at emission sources and storing it, thus keeping it from being released into the atmosphere.
Asked whether the company’s main focus is to use the block for carbon capture and storage, Routledge noted that this was one of the options that ExxonMobil would explore.
“Our first priority, and this is in line with the Government, is to understand whether or not there are economically producible hydrocarbons in the block. But we do have a longer-term ambition, which is part of our overall corporate ambition, to achieve the 2050 target of net zero across our operation.
“And as part of that, we’re looking at S8 block. If there are not hydrocarbons there or indeed, should there be hydrocarbons and we can produce them first, would there be a good location for us to sequester CO2 in the future?” Routledge questioned.

According to the executive, Exxon is run on a multi-decade basis, so they will have to determine this in the near future in order to better plan its operation. However, he noted that a carbon capture development will benefit not only Exxon, but also Guyana’s low carbon development credentials.
In October 2024, it was announced that four of six bidders from the 2023 oil bid round had accepted the new model Production Sharing Agreement (PSA) and were either processing the agreement or conducting final reviews.
According to a list released by the Government, Total Energies EP Guyana BV, in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas Ventures SDN BHD (Malaysia) – which bid for block S4 – had already accepted the PSA. Currently, their agreement is in the final stages of review.
Delcorp Inc Guyana, comprising Watad Energy and Communications Limited and Arabian Drilling Company of Saudi Arabia, which bid for block D1; and Ghana-based Cybele Energy Limited, which bid for block S7, had also accepted their PSA, which is in the final stages of review.
International Group Investment Inc of Nigeria, which bid for blocks S5 and S10, have accepted the PSAs for both blocks, which are being processed.
However, the Natural Resources Ministry had explained that Stabroek Block partners ExxonMobil Guyana Ltd, Hess Guyana Ltd & CNOOC, which had bid for block S8, were reviewing the PSA.
Then, during the consideration of the budget estimates last month, Natural Resources Minister Vickram Bharrat had explained that the Government would be signing four standard PSAs this year with bidders from the 2022 bid round.
Among the bidders the Government will be signing PSAs with are the consortium of TotalEnergies, Qatar Energy, and Petronas; International Group Investment Incorporated and Cybele Energy.