Chevron tells shareholders 10-12 wells to be drilled in Guyana’s mighty Stabroek Block next year

Nov 19, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – Chevron, the new indirect entrant into Guyana’s oil sector, has announced, via its Chief Executive Officer, Mike Wirth, that 10-12 wells will be drilled in the Stabroek Block in 2024.

This follows Chevron’s recent acquisition of Hess Corporation, in a US$53 billion all-stock deal, set to substantially diversify Chevron’s asset portfolio.

The acquisition, formalized on October 23, places Chevron in a strong position, since Hess is a 30% stakeholder at the extremely valuable Stabroek Block, operated by ExxonMobil. “Guyana is already an exceptional, differentiated asset that adds significant resource inventory in the deepwater,” Wirth said after the acquisition.

ExxonMobil had received approval from the Environmental Protection Agency (EPA) to conduct a 35-well exploration and appraisal campaign, which kicks off this year. The company is looking to unlock as many barrels as it can before having to relinquish the block in a few years.

In 2022, ExxonMobil made discoveries at Barreleye-1, Patwa-1, Kiru Kiru-1, Lau Lau-1, Sailfin-1, Lukanani-1, Seabob-1, Fangtooth-1 and Yarrow-1. Then, in 2023 so far, Exxon made discoveries at Fangtooth SE, Lancetfish-1 and Lancetfish-2. In April last year, when Exxon announced the finds at Barreleye, Lukanani and Patwa, it had updated the resource estimate to 11 billion barrels, but has not further revised it since. It has been 19 months and seven discoveries later.

A map of the Stabroek Block

According to Arthur Deakin, Energy Director at Americas Market Intelligence, the arrival of oil major in the Stabroek block consortium, is likely to see exploration exceeding expectations. He believes that Chevron can encourage more aggressive and adventurous exploration, and that it is likely to advocate more forcefully for its own views on the development of the acreage, through its ownership of Hess. The increase of oil majors operating offshore Guyana raises concerns among stakeholders, about the pace of exploration and development, and whether the country’s regulatory capacity will be able to keep up.

Chevron’s entry into the Guyana oil sector is timely, considering the substantial production growth expected. With three projects operating simultaneously, the Stabroek Block is set to reach 620,000 barrels of oil production per day in the new year. Guyana is poised to become the world’s largest per capita producer of oil, when ExxonMobil achieves 1.2 million barrels per day offshore Guyana.

ExxonMobil is the operator with a 45% interest. With the acquisition of Hess, Chevron now has dominion over Hess’ 30% stake, while CNOOC retains the remaining 25%. Hess will remain the 30% partner in the Stabroek Block, as the transaction did not entail renaming, restructuring or replacing Hess Guyana. The local subsidiary will continue to be owned by Hess International, while that company will be owned by Chevron.

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Chevron, Chief Executive Officer, Mike Wirth, shareholders, Stabroek Block

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