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Exxon sees opportunity to expand exploration in Stabroek Block with recent developments in Venezuela – Woods
(Kaieteur News) – With recent developments in neighbouring Venezuela, American oil major ExxonMobil, that operates in Guyana says it is optimistic that changes there could eventually create a more favourable environment for the company to explore parts of Guyana’s Stabroek Block that have long been inaccessible due to the border controversy between the two countries.
The comments were made by ExxonMobil Chairman and Chief Executive Officer Darren Woods during the company’s fourth-quarter earnings call on Friday.
ExxonMobil Chairman and Chief Executive Officer, Darren Woods
Woods was asked about the future of the Stabroek Block exploration licence, which expires in 2027, and the large portion of the block currently under force majeure because it lies in Guyana’s Exclusive Economic Zone but it is an area that Venezuela claims. He was also questioned on whether that area could qualify for an extension and what milestones would be required before work could begin to evaluate its resource potential.
Woods first explained that ExxonMobil Guyana Limited (EMGL) has been using seismic data and lessons from its development drilling programme to identify additional exploration targets in areas of the Stabroek Block that are currently accessible. He added, “We still think there’s opportunity in that space to explore the block that we can currently access.”
Addressing the issue of relinquishment, Woods said decisions on returning acreage are based on a well-informed understanding of the geology and opportunity set.
Last July, Exxon relinquished a portion of the Stabroek Block to the State. The government had announced it agreed with the company that a minimum area of 2,534 square kilometres must be returned.
The Stabroek Block spans approximately 6.6 million acres, or about 26,709 square kilometres, making the agreed relinquishment a minimum of 9percent of the total area. However, the relinquished section did not include any discoveries or production activities and excluded areas Exxon could not explore because of the Guyana-Venezuela border controversy.
Moreover, Woods noted that the disputed portion of the block remains under force majeure, a mechanism he said preserves Exxon’s rights in the acreage. “I think one of the advantages of force majeure, is it pauses the clock and so we will have an opportunity to do what we need to do in that portion of the block when it’s available to us,” he said.
The Stabroek Block
Referring to recent developments in Venezuela, Woods added, “Obviously, with the developments in Venezuela, perhaps we’ll see an opportunity to, with less naval patrols, that’ll make it a little more friendly environment. So, we’ll see how that goes.”
He also pointed out that the ruling of the border controversy case by the International Court of Justice (ICJ) will be a key development. “So, I think that’ll be a critical milestone,” he said.
“But we’ve got plenty of work ahead of us here in the short term and then longer term, we’ll get into that additional acreage and see what the opportunity looks like. We’re pretty optimistic,” Woods added.
His remarks came against the backdrop of recent developments in Venezuela. On January 3, the U.S. military conducted an operation in Caracas that resulted in the arrest of Venezuelan President Nicolás Maduro and his wife, Cilia Flores. Both are now facing narco-terrorism charges in the U.S. Following Maduro’s removal, President Donald Trump announced plans for the U.S. to “run” Venezuela until a proper transition takes place, while also outlining ambitious plans for the oil-rich country’s resources.
The Stabroek Block spans 6.6 million acres and is estimated to 11.6 billion barrels of oil. Currently, oil is only being produced from the Stabroek Block, where four developments are producing more than 900,000 barrels per day.
EMGL is the operator and holds a 45 percent interest in the 6.6-million-acre block, which is estimated to contain 11.6 billion barrels of oil. CNOOC holds a 25 percent stake, while Hess owns 30 percent. Chevron acquired Hess last year, giving it indirect access to the Stabroek Block. Since 2015, Exxon has unlocked over 40 discoveries in the block.
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