ExxonMobil makes ‘world-class’ find off Guyana

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ExxonMobil has confirmed a second major oil find in one of Guyana’s offshore blocks, suggesting that the country is not only set to become a major oil producer but may also emerge in the longer term as one of the Caribbean’s more significant economies.

On June 30 the company said that a second exploratory well located 193km (120 miles) off the Guyanese coast in its Stabroek block had proved to be a “world-class discovery” with a recoverable resource of between 800m-1.4bn barrels of oil. The type of crude discovered, according to the industry publication the Petroleum Argus, was of a light quality of 32°API beneath 5,551ft of water and at a depth of 17,963ft.

Liza-2 is the second such well drilled by ExxonMobil. In May 2015, the company said it had made a substantial oil discovery at its Liza-1 well, also on the Stabroek block, at a location about 3.3 km from the new find. The company said that it plans to drill a third exploration well, Skipjack, in July using the Stena Carron drillship that it used for Liza-2.

Commenting, ExxonMobil’s President, Steve Greenlee, said in a company statement: “We are excited by the results of a production test of the Liza 2 well, which confirms the presence of high-quality oil from the same high-porosity sandstone reservoirs that we saw in the Liza 1 well completed in 2015. We, along with our co-venturers, look forward to continuing a strong partnership with the government of Guyana to further evaluate the commercial potential for this exciting prospect.”

ExxonMobil has a 45% stake in the block, while Hess holds 30%, and the Chinese state-owned China National Off- shore Oil Corporation (CNOOC), through the upstream oil and gas company Nexen, claims the remaining 25%.

Industry reports suggest that the field, which could cost US$18bn to develop, is one of only a small number of such finds in recent years at a time when, unlike gas, significant oil finds have become less common. Some analysts suggest that the costs of developing the field would be viable at a world market price for oil of US$40 a barrel or less.

The implications for Guyana, if as expected the company proceeds to production, are substantial.

This is an extract from the Caribbean Council’s leading weekly editorially independent publication, Caribbean Insight, which provides in depth information on current economic, political and commercial developments in the Caribbean and news on events in Europe and the US that affect the region. Business people, academics, and those with a general interest in the Caribbean find it an invaluable tool for developing and maintaining knowledge and providing an insight into political, economic and commercial events in the region.

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