ExxonMobil boasts of breaking world record in Stabroek Block to increase profits

Jun 23, 2023 ExxonMobil, News, Oil & Gas

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Kaieteur News – Oil giant ExxonMobil has been undertaking a suite of measures to boost its production output from the resource-rich Stabroek Block. According to the multinational corporation, it has completed a ‘World record’ number of well tests to increase value from the projects.

ExxonMobil is the leader of a consortium currently producing oil offshore Guyana. Its operator, Esso Exploration and Production Guyana Limited (EEPGL), is extracting the resources from the Liza One and Two projects presently. A third project is expected to startup later this year.

In its 2022 Annual Report seen by Kaieteur News, the oil company detailed its activities conducted in the past year geared towards the development of the natural resources. It noted that “Extensive drilling operations continued in the Stabroek Block in 2022 with three of the six rigs focusing on exploration and appraisal activity.” Appraisal activities refer to drilling works that are carried out once oil or gas has been discovered in order to assess the extent of the field, the reserves, the possible rate of production, and the properties of the oil or gas.

Meanwhile, the oil giant reported that its exploration success has resulted in more than 30 discoveries since the initial Liza discovery in 2015.

The company said, “Exploration and appraisal activity in the block is critical to enhance understanding of the block’s potential to increase value and inform future development opportunities.” Some 11 such exploration and appraisal wells were completed in 2022 with activity extending across the block in the northwest, southeast and central areas.

To this end, ExxonMobil shared, “One such critical operation includes well testing to provide further reservoir characterization data. Building on the Uaru-1, Mako-2, Longtail-2, Whiptail-2, and Turbot-2 well tests from 2021, the team safely completed a world record seven consecutive well tests from a floating rig, with the execution of well tests at Tilapia-1 and Pinktail-1.”

Kaieteur News understands that the reservoir characterization data collected provides dynamic large-scale properties about discovered resources, including reservoir permeability and connectivity to enhance the geologic interpretation. Notably, the data also provides critical well performance and fluid characterization data to support the design of future development wells and reservoir management strategy.

It was also explained that analyses of post-drill results continue in the Canje and Kaieteur Blocks based upon the drilling results from Jabillo-1, Bulletwood-1, Sapote-1 and Tanager-1 wells. This analysis will further inform block scale prospectivity and the potential for potential maturation of additional prospects.

Only last month this publication reported that ExxonMobil has been deploying its best technology and experts for “unprecedented results” maximizing value from all fronts in Guyana. This means that the company has been exhausting efforts to extract Guyana’s oil.

It was ExxonMobil Corporation’s Senior Vice President & Chief Financial Officer (CFO), Kathy Mikells who disclosed that the oil giant is sparing no effort in maximising value from Guyana on all fronts, as quickly as possible.

Towards this end, Mikells said Exxon has launched an exercise that allows for the simultaneous execution of exploration, appraisal, and development activities in the Guyana basin, specifically at the Stabroek Block which has unlocked 11 billion barrels of oil equivalent resources.

She noted that the company’s approach has resulted in tremendous financial success. Mikells said, “Our technology, integration, and project management capabilities enable us to grow this unique asset at an industry-leading pace.”

Compared to the first quarter of 2022, the Chief Financial Officer said Exxon added about 300,000 oil equivalent barrels per day to global supply driven by 40% production growth in Guyana and the Permian and good operational performance. The Exxon official said this more than offset the impact of its divestments and the expropriation of Sakhalin-1 in Russia, with overall production volume up 160,000 oil-equivalent barrels per day.

While the company has been accelerating the production and exploration activities, it has been refusing to take full responsibility of an oil spill that may occur in the Stabroek Block as a result of its activities. Both operational developments are producing oil above the safe operating limits, prescribed in the Environmental Impact Assessments (EIAs) conducted by Exxon. In the meantime, Guyana merely has a US$600 million insurance to respond to such a disaster.

The Court recently ordered the oil company to provide the country with an unlimited parent guarantee to cover all costs associated with a spill. This decision has been appealed and is currently before the Court of Appeal. Exxon has since provided a US$2 billion affiliate company guarantee, pending the decision of the Court.

It is also critical to note that projects in the Stabroek Block are being developed under a lopsided agreement signed between the government and Exxon. The contract enables Exxon to deduct 75 percent of the revenue towards the recovery of costs to develop the resources. The remaining 25 percent is then shared equally between government and the oil companies. This means 12.5 percent of the profit is given to Guyana while Exxon benefits from the other 12.5 percent. Exxon is also required to pay a meager two percent royalty to the country. Activists in the country have protesting the arrangement and are demanding that the terms be renegotiated to ensure Guyana benefits from the vast resources discovered offshore.

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• ExxonMobil, oil, profits, record, world

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