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Exxon in race to find more barrels before relinquishing Stabroek Block licence in 2026
Kaieteur News – ExxonMobil Corporation is racing against time to discover more oil barrels in the Stabroek Block before the licence expires. Hess’ Chief Operating Officer, Greg Hill recently said the expiry will occur in October 2026.
Stabroek Block
He said that there are multi-billion-barrel potential remaining in the block, and the companies are moving to lock in these reserves under the current fiscal terms in the lopsided Stabroek block production sharing agreement (PSA).
“We’ve got multibillion barrels of upside. The licence expires in October of 2026. We will take the next four to five years to fully understand that potential get it locked down,” Hill said.
The current PSA has been widely condemned as lopsided, with the government of Guyana introducing a new model PSA that includes a 10% royalty payment. However, Vice President Dr. Bharrat Jagdeo said that he will not apply these terms to the Stabroek Block, and ExxonMobil will continue to pay the measly 2% royalty for its developments. Kaieteur News has shown that Guyana lost out on US$230 million from the last quarterly royalty payment alone by not applying the new 10% royalty to the Stabroek Block.
Since 2015, ExxonMobil has discovered more than 11 billion oil-equivalent barrels, with 10 discoveries made in 2022 alone, making it the best exploration year for the company. In 2023, the partners plan to drill 10 wells, targeting a range of prospects and play types, including lower-risk wells near existing discoveries and deeper intervals. Two discoveries have already been announced this year at the Fangtooth and Lancetfish wells.
ExxonMobil is also awaiting government approval to drill another 35 wells in the Stabroek Block, which would be supported by the extension of a contract with Noble Corp. to use several drill ships until 2027. The Environmental Protection Agency (EPA) is reviewing a cumulative impact assessment (CIA) from ExxonMobil for the 35-well campaign, which has revealed that 14 Caribbean islands could be affected by an oil spill if one were to occur.
The government has endorsed the company’s plans to produce more than a million barrels per day (bpd) in a few years and recently approved the Uaru project, which will take production offshore Guyana over a million bpd by 2026. The government is also reviewing an application for approval for the Whiptail project, expected to come online in 2027.
ExxonMobil is the operator of the Stabroek Block, with a 45% stake, while Hess has a 30% stake and CNOOC has the remaining 25%.
As Hill has said that the partners will take the next few years to examine the exploration upside, there is increasing advocacy and pressure from environmental activists to ensure Exxon’s operations do not harm the environment as they ramp up. The recent High Court judgment on the failure by the Environmental Protection Agency (EPA) to fulfill its obligations and secure an unlimited parent/affiliate guarantee from ExxonMobil for the Stabroek Block has raised serious concerns.
- Environmental Protection Agency, G, Guyana, Hess’ Chief Operating Officer, lopsided Stabroek block, PSA
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