Exxon strikes again
– discovery equivalent to 500 million barrels of oil
ExxonMobil Corporation has announced the discovery of additional oil in the Payara reservoir offshore Guyana, increasing the total Payara discovery to approximately 500 million oil-equivalent barrels.
According to information released by ExxonMobil on Tuesday, drilling encountered 59 feet of high-quality oil-bearing sandstone in the Payara field. The well was drilled to 19,068 feet (approximately 7000 feet waters) some 12 miles North West of the Liza phase 1 Stabroek Block project.
This places the discovery just 130 miles offshore. Guyana Times understands that ExxonMobil affiliate Esso Exploration and Production Guyana Limited did the drilling. Exxon stated that with this discovery, the estimated gross recoverable resource in the Stabroek Block has increased to approximately 2.5 billion oil equivalent barrels.
The discovery also enhances Guyana’s standing, but it comes at a time when the Government has already agreed to a 50 per cent profit-sharing system and a two per cent royalty agreement. It is an arrangement the Government has defended on the grounds that it received the best advice possible.
“Payara-2 confirms the second giant field discovered in Guyana,” Steve Greenlee, President of ExxonMobil Exploration Company, stated. “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.”
It was only in June that Exxon was granted its formal production licence. Before that, reviews were done of the technical and environmental aspects of the Liza Project Development Plan submitted by Esso Exploration and Production (Guyana) Ltd in December 2017.
The Stabroek Block is 6.6 million acres. Esso Exploration and Production Guyana Limited is the operator and holds a 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 per cent interest.
String of discoveries
Drilling on Payara began on November 12, 2016, with initial total depth reached on December 2, 2016. In January of this year, the oil giant had announced it had struck oil in its Payara-1 well, targeting the same type of reservoirs as the well’s Liza counterpart.
Before that, the company had announced that it made its third significant discovery in its drilling explorations offshore Guyana. Its partner, Hess Corporation, had noted that the Liza 3 exploratory well’s net value could be US$6.2 billion based on calculations from the Bank of Montreal (BMO) Capital Markets.
In late June 2016, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 5475 metres at 1692 metres water depth. Drilling results confirmed recoverable resources to be between 800 million and 1.4 billion barrels of oil equivalent. Data from the Liza 2 well test is being assessed.
In May 2015, Exxon confirmed its first significant oil discovery at its Liza 1 exploration well, where more than 295 feet of high-quality oil-bearing sandstone reservoirs was encountered.
Exxon’s oil find in Guyana has attracted international attention, with a number of seminars being held over time. In addition, assistance is being provided by the International Monetary Fund (IMF) to boost Guyana’s administrative capacity to handle the expected inflow of revenue.