ExxonM continues to appraise wells to update oil reserves

May 31, 2024 News

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– but Govt. ducking information from public

Kaieteur News – ExxonMobil Guyana Limited (EMGL) in its most recent Annual Report, published for 2022 highlights that appraisal activity was conducted across the Stabroek Block to assess the quality and quantity of oil found, but the Government of Guyana (GoG) continues to hide the data from the public.

Chief policymaker for the petroleum sector, Vice President Bharrat Jagdeo was asked by Kaieteur News on Thursday for the umpteenth time during his weekly media conference to provide an update on the reserves, since he previously committed to reviewing the reports submitted by Exxon- which contains information on reserves – to be made public. Jagdeo had said he needed to determine whether the reports contained “proprietary information”.

The politician when faced with the question however sought to clarify that he never promised to provide an update on the oil reserves. In fact, he told reporters that there has been no change to reserves. “What I might have said is that they are required to, every three months, give the Ministry an update on changes in the reserves and I know that no update has been given on the changes in the reserves but they are required every three months to issue a document to the Ministry updating the reserves if they have any information about the reserves being updated. There is so far none of that,” Jagdeo reported.

Notably, the Vice President again explained that Exxon is focused on oil production rather than appraisal activity. According to him, “because you make a new discovery, (it) doesn’t automatically adjust the reserves, a subsequent action, appraisal action etcetera that could either increase or decrease the reserves…at this point in time, the focus is not on the update of that (reserves) because that is what Exxon said, updating the numbers, because we are moving to production stage.”

Although Jagdeo claims that the company is not focused on understanding the reserves, the company has communicated otherwise in its Annual Report. In fact, ExxonMobil is required to conduct appraisal activities before moving to production. During appraisal, delineation wells might be drilled to determine the size of the oil or gas field and how to develop it most efficiently. According to the 2022 Report seen by this newspaper, a total of 11 exploration and appraisal wells were completed that year. It states, “Extensive drilling operations continued in the Stabroek Block in 2022 with three of the six rigs focusing on exploration and appraisal activity…eleven exploration and appraisal wells were completed in 2022 with activity extending across the block in the northwest, southeast and central areas.”

ExxonMobil was keen to note that exploration and appraisal activities in the block are critical to enhance understanding of the block’s potential to increase value and inform future development opportunities. Although the reports on the appraisal works have been shared with the government, the administration is reluctant to disclose the country’s updated oil reserves.

VP Jagdeo, at previous press conferences said there was no significant update to the last resource update, provided by the company in April 2022, some two years ago. Since the last update, ExxonMobil has announced eight new discoveries in the Stabroek Block. One of the Co-Venturers, CNOOC, in its 2023 Annual Results, disclosed the Lancetfish discovery, which was made in April 2023, averaged some 100 million tons, which is equivalent to 746 million barrels, according to the conversion formula of the Independent Petroleum Association of America.

The last resource count, dated April 26, 2022, declared the recoverable resource for the Stabroek Block at nearly 11 billion oil-equivalent barrels. Since then, Exxon announced eight subsequent discoveries, the Seabob-1 and Kiru-Kiru-1 wells, Sailfin-1, Yarrow-1, Fangtooth SE, Lancetfish-1, and Lancetfish-2 wells, along with the recently announced Bluefin discovery.

In an invited comment, Opposition Parliamentarian, David Patterson said the nation was not being updated on its oil reserves as this would trigger massive countrywide protests for a better deal. The previous Coalition government had accepted a 2% royalty and granted excessive tax holidays to the Contractor and its sub-contractors. Guyana merely receives 12.5 of profits, after Exxon deduct 75% each month to recover its investments. Patterson believes that the blackout of information on the recoverable resources could be a strategic move by the oil major to avoid an intensified public pressure for renegotiation of the lopsided Production Sharing Agreement (PSA).

“If Guyanese are clamouring every single day for a renegotiation when we only have 11 billion barrels proven reserves, imagine the clamour and the outcry when they (Exxon) actually finish appraising these wells and it jumps from 11 billion barrels to say something like 40 billion barrels and the true magnitude of what Exxon has already discovered becomes known,” the former Minister said.

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• appraisal, ducks, Jagdeo, reserves, update

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