ExxonMobil updating Stabroek Block reserves for themselves but keeps Guyana in the dark – Senior VP reveals at Energy Conference  

Mar 13, 2024 ExxonMobil, News, Oil & Gas

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Kaieteur News – ExxonMobil has been updating the Stabroek Block reserves but keeping Guyanese in the dark when it comes to the true value of those resources. The information is instead being used by the company to inform its investment decisions across the block.

This was recently revealed by the Senior Vice President of Exxon Mobil Corporation, Neil Chapman, while disclosing the company’s strategy to boost Guyana’s daily oil production to 1.2 million barrels per day (bpd) by 2027. Chapman was at the time responding to questions posed to him during the Morgan Stanley’s Energy and Power Conference hosted in New York last week when he disclosed that a total of six drill ships are currently operating in Guyana, conducting not only exploration but appraisal activities as well to help the company understand the resources.

Chapman said, “We have six drilling ships in the basin in pretty close proximity. And these drill ships are doing a combination of what I call exploration drilling, appraisal drilling and development drilling. Development drilling is drilling wells for the next production vessel, appraisal is appraising so you fully understand or comprehend the resource and then exploration is, you can call it wild cats if you like…”

He noted that Exxon is continuing to appraise the south eastern corner of the Stabroek Block, which the company hopes, can lead to further discoveries. In the realm of oil and gas, companies undertake a process known to the industry as appraisal to help the developer determine whether or not a project is viable. During appraisal, more wells are drilled to collect information and samples from the reservoir and other seismic survey might also be acquired in order to better delineate the reservoir. This process helps to reduce the range of uncertainty in the volumes of hydrocarbons in place; define the size and configuration of the reservoir and collect data for the prediction of the performance of the reservoir during the forecasted production life. Since 2022, the operator of Guyana’s Stabroek Block has not updated the country’s recoverable resource for the Stabroek Block. Nearly two years since the last update of an average 11 billion oil-equivalent barrels, the company recently explained it is not focused on providing an update to that number, but more so on monetising those resources.

It was the President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge who told the media at a press conference last month, “In the early days of exploring the basin, Guyana was a frontier basin years ago and everyone was excited about the discoveries. In the early days, there was a focus on resources and how big the basin might be and how many reservoirs have we penetrated.”

He added, “But that focus has shifted to, of that discovered resource, can we monetize it and move it forward into economic development…” Routledge explained that the company is assessing the development concepts and how to manage costs down to be effective and ensure these are robust investments for the long term.

Given the foregoing premise, he said Exxon is no longer talking about discovered resources anymore. He said, “We are talking about developments and can we move the resource we found to date forward, what additional work needs to be done to reduce risks associated with that resource, do we need to find more in a particular area so we have sufficient energy density to make an economic project. So, we are not going to talk about that number going (forward). We are more focused on the projects.”

Notably, the chief policy maker for the sector, Vice President Bharrat Jagdeo had agreed with the company’s position to hide the new discovery figures from the public.

During a press conference at Office of the President, the Vice President said the question of Exxon’s update of the resources is not as serious an issue as it is being made out to be by some industry stakeholders. He said Exxon’s announcement, or lack thereof, will not change the fact that there is a discovery already there for the benefit for the country.

“It’s just a (matter of) timing when we increase our reserves or not…In fact, they (Exxon) have a greater kind of need to do that because globally… they look at your reserve and that helps to move stock prices for Exxon but they’ve decided that they want to focus more on appraisals as to how many barrels are in these discoveries, etc,” said the Vice President. Overall, he said Exxon’s move to focus on monetizing the discovered resources is a logical step. This therefore means that Exxon has deliberately decided not to update the nation on the true value of its offshore resources and also has the blessings of government to instead rush to pump the country’s oil.

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• appraisal, dark, oil, reserves, resources, update

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