Exxon gets one year extension to keep entire Stabroek Block before giving up 20 %

Jun 23, 2023 ExxonMobil, News, Oil & Gas

…partners will unleash massive exploration programme to leave no discovery behind – Hess boss reveals

Kaieteur News – Though ExxonMobil and its partners were required to surrender a portion of the Stabroek Block in October, Vice President, Bharrat Jagdeo confirmed yesterday that the companies will get one more year to keep the entire concession.

Come next year however, they will have to give up 20 percent of the oil rich concession.

At a press briefing at Office of the President, Jagdeo said the premise for extending the companies’ hold on the block is due to the COVID-19 period which saw exploration activity being severely affected. With the extension granted, he said the next stage of talks pertains to what portion of the block would be returned to the state. The extension of ExxonMobil’s hold on the concession was also raised by Hess Corporation whose Chief Executive Officer, John Hess participated in a separate conference yesterday too.

He noted that the partners will get more time to explore the block since they experienced setbacks during the height of COVID-19 in 2020z. The CEO said, “During COVID we really had a force majeure period because Exxon couldn’t even get workers in the country. We couldn’t run three rigs for exploration. So we took that exploration drilling pause…”

Over the next 12 to 24 months, Hess said the partners will be lengthening their search for oil into the northwest section of the block. He said much of the attention as well as the discoveries made have concentrated in the southeast portion. Hess also noted that the partners plan to drill 10 to 12 exploration appraisal wells. The CEO said, “We don’t want to leave any well behind. It’s not in the interest of the government and it’s not in the interest of our shareholders or the joint venture.”Hess said the partners look forward to continuing to working with the Government of Guyana and to realize the remarkable potential of Guyana’s world class resources for the benefit of all stakeholders. He said, “The world will need these vital oil resources to meet future energy demand and help ensure an affordable, just and secure energy transition.”

With respect to the projects in the Stabroek Block, the Liza Phase 1 and Liza Phase 2 developments produce an average of 380, 000 gross barrels of oil per day. The third sanctioned development on the Stabroek Block, Payara, is targeted for startup early in the fourth quarter, with a gross production capacity of approximately 220,000 barrels of oil per day. The fourth sanctioned development, Yellowtail, is expected to come online in 2025 with a gross production capacity of approximately 250,000 barrels of oil per day. The fifth project called Uaru will have a production capacity of approximately 250,000 gross barrels of oil per day with production targeted to startup in 2026. A sixth development, Whiptail, is expected to be submitted for government and regulatory approval later this year.

In total, the Stabroek Block partners have a line of sight to six floating, production, storage and offloading (FPSOs) with a gross production capacity of more than 1.2 million barrels of oil per day by the end of 2027. They have also said there is potential for up to 10 FPSOs to develop the estimated gross discovered recoverable resources of more than 11 billion barrels of oil equivalent. The Stabroek Block is 6.6 million acres. ExxonMobil affiliate, Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.