United States oil giant ExxonMobil is preparing to head to the next prospect on its sprawling holdings off Guyana, which have the potential to be even bigger than the massive Liza discovery.
The US super major and its partners are targeting the large Skipjack prospect following the success of the Liza 2 appraisal well, it has confirmed.
The Texas-based company has received approval to move the drillship Stena Carron about 24 miles (39 kilometres) to the north-west of the original Liza 1 discovery to spud Skipjack this month.
It has confirmed too that the Stena Carron is still at the Liza 2 location and has not yet been mobilised to Skipjack.
The operation was given approval to commence on July 1, according to a notice published by Guyana’s Maritime Administration Department (MARAD). It said it would spud the new well this month.
There had been some speculation that the company would target the Jurassic-aged Ranger prospect for its next wildcat well, which is a different ‘play’ concept to the Upper Cretaceous Liza discovery.
A second Liza look-alike dubbed Payara, which lies about 19 miles to the north-west of Liza 1, could also be in the drilling queue through the end of this year.
Sources familiar with the geology in the vast Guyana-Suriname basin called the Skipjack prospect a look-alike to Liza, reiterating comments previously made by executives at ExxonMobil’s partner Hess that the Stabroek block contained numerous structures with similar attributes as Liza.
But they noted that the aerial extent of the Skipjack prospect was even larger than Liza’s, which is now the biggest oil find of last year and may be larger than the biggest oil discovery ever in the US Gulf of Mexico – BP’s one-billion-barrel Thunderhorse field.
The Liza-2 well had confirmed “a world-class discovery” on the Stabroek block, with estimated potential recoverable resources of between 800 million barrels of oil equivalent and 1.4 billion barrels, ExxonMobil said earlier this month.
The appraisal well struck more than 190 feet of oil-bearing sandstone reservoirs in Upper Cretaceous formations.
The test confirmed high-quality oil, ExxonMobil said. Sources familiar with the appraisal programme indicated that the core was bleeding oil when it was pulled to the surface.
The appraisal well was drilled about two miles from the Liza-1 discovery drilled in 2015.
The well was drilled to 17,963 feet in 551 feet of water using the drillship Stena Carron.
ExxonMobil performed a drill stem test on the Liza 2, which is expected to help the supermajor decide on how best to develop the find.
The companies are said to be looking at both an early floating production system with capacity of around 60,000 barrels per day (bpd) of oil that could be online in 2018 and another, larger floating production, storage and offloading vessel with capacity of around 120,000 bpd to 150,000 bpd for full field development.
SBM Offshore and Modec have been shortlisted by the supermajor to provide front-end engineering and design studies.
ExxonMobil operates Liza on the Stabroek block with a 45 per cent stake with Hess holding 30 per cent and China National Offshore Oil Corporation-owned Nexen with 25 per cent.
While deepwater drilling and development has fallen out of favour with many companies due to its high costs and long-cycle investments, analysts said the Liza find could have very competitive economics.
Analysts at investment bank Goldman Sachs estimated that Liza has a breakeven oil price of between US$45 and US$50 and their counterparts at investment bank Tudor Pickering Holt said they believe the breakeven could be below US$45.