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Page added on January 13, 2017
ExxonMobil Strikes More Oil Offshore Guyana
Exxon Mobil Corp. reported Thursday it had further established offshore Guyana as a significant exploration province with a new oil discovery and successful appraisal drilling at its Liza field.
The Payara-1 discovery encountered over 95 feet (29 meter) of high-quality, oil-bearing sandstone reservoirs. Payara-1 was drilled in a new reservoir and marks the second oil discovery ExxonMobil has made at the 6.6 million acre (26,800 square kilometer) Stabroek Block, the company said in a Jan. 12 press statement.
Located about 10 miles northwest of ExxonMobil’s 2015 Liza discovery, Payara-1 was drilled to 18,080 feet (5,512 meters) in 6,660 feet (2,030 meters) of water, ExxonMobil said in a Jan. 12 press statement. ExxonMobil started drilling Payara-1 on Nov. 12, reaching initial total depth Dec. 2.
The company is drilling two additional sidetracks at Payara to quickly evaluate the discovery; a well test is underway to further evaluate the well results, ExxonMobil said.
Appraisal drilling at Liza-3 also identified an additional, high quality, deeper reservoir directly below the Liza field, which is estimated to contain 100 to 150 million oil equivalent barrels. ExxonMobil said it was evaluating the additional resource for development in conjunction with the Liza discovery. The Liza field is estimated to yield the equivalent of 800 million to 1.4 billion barrels of crude.
ExxonMobil drilled by the Payara-1 well and conducted the Liza appraisal drilling using the Stena Carron (UDW drillship), according to Rigzone’s Riglogix database.
These recent exploration successes are examples of the company’s technological capabilities in ultra-deepwater environments, which will enable effective development of the resource for the benefit of the people of Guyana and ExxonMobil shareholders, Steve Greenlee, president of ExxonMobil Exploration Company, in the release.
After drilling a dry hole at the Skipjack prospect in September, Payara and Liza-3 reconfirmed the high potential of the Cretaceous play in Guyana’s deepwater, Matt Blomberth, head of Latin America Upstream Research at Wood Mackenzie, said in a Jan. 13 press statement. Payara-1’s proximity to Liza will enable economies of scale for the area’s development.
The Guyanese government’s approval of a $500 million oil and gas service hub on Crab Island will give added impetus, Blomberth said. However, lack of offshore infrastructure or nearby gas market means that the partners will face high costs to dispose of natural gas that cannot be reinjected or flared. Wood Mackenzie estimates wellhead gas volumes of 2.1 to 2.5 trillion cubic feet between Liza and Payara.
ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator of Stabroek with 45 percent interest. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
Last month, Esso Exploration and Production Guyana Limited awarded contracts to SBM Offshore for a floating production, storage and offloading (FPSO) vessel, a key step in moving the Liz field towards first production, ExxonMobil said in a Dec. 20, 2016 press statement. The contracts call for SBM Offshore to perform front-end engineering and design for the FPSO and, subject to a final investment decision on the project this year, will construct, install and operate the vessel.
Wood Mackenzie estimates that an 180,000 barrels per day FPSO at Liza would produce at near capacity until 2030. The firm also assumes a second FPSO will be needed at Payara. Assuming a long-term Brent oil price of $65/barrel, Payara’s net present value 10 reserves could range from $426 million to $1.6 billion. This estimate is based on low case model scenario of 300 million barrels of oil equivalent (MMboe) to a 100,000 barrels per day-FPSO, and a high case scenario assuming reserves of 500 MMboe produced by a 150,000 barrels per day-FPSO.
21 Comments on "ExxonMobil Strikes More Oil Offshore Guyana"
onlooker on Fri, 13th Jan 2017 1:51 pm
Wonderful world consumption of liquid fuels averaged 96 million barrels b/d. Enuf said
dave thompson on Fri, 13th Jan 2017 2:07 pm
Yes, and do the local citizens benefit? LOL!
Midnight Oil on Fri, 13th Jan 2017 2:18 pm
Nice place they found it….Isn’t that the place Devil’s island is located? The movie with Steve McQueen and Dustin Hoffman Papillon
Film location.
Shouldn’t be too hard to find a crew to man the platform….
Anonymous on Fri, 13th Jan 2017 2:18 pm
Farticle says
” effective development of the resource for the benefit of the people of Guyana and ExxonMobil shareholders, ”
Im going to go out on a limb here, and say I am pretty certain most of the ‘benefits’ of this ‘development’ (aka uS resource pillaging), will go to EM shareholders, and not the people of Guyana. Safe to say….
onlooker on Fri, 13th Jan 2017 2:21 pm
Anon, as sure as the Sun coming up
dave thompson on Fri, 13th Jan 2017 2:38 pm
I love it, out on a limb of corporate disclosure.
Nony on Fri, 13th Jan 2017 4:44 pm
COP just announced a discovery on the Alaska North Slope:
http://www.alaskajournal.com/2017-01-13/conocophillips-announces-big-find-north-slope#.WHlTMmfrvIU
Go Speed Racer on Fri, 13th Jan 2017 6:00 pm
Wait a minnit. They drilled down 24,000 feet below the sea surface? To hit 95 foot thickness of oil?
Sounds like running out of oil.
Maybe Mr Rockman can explain.
rockman on Fri, 13th Jan 2017 6:16 pm
Apparently some folks not knowing sh*t about how foreign oil concessions work TODAY aren’t shy about advertising their ignorance. LOL.
Granted these are just estimates since we can’t predict future oil prices. But using a 2021 estimate of $79/bbl (use your own prices if you like) just the Liza well alone will generate US$350+ MILLION (GYD$73 BILLION) PER YEAR for the Guyana govt. Which would represent about 1/3 of the country’s latest national budget.
Details: http://demerarawaves.com/2016/09/01/guyana-will-initially-earn-less-than-gyd100-billion-in-oil-profits-annually/
I doubt anyone here bothered to research typical foreign oil concession structures these days. But this is 2017…not 1930. I wish we could still get leases for a handful of beads and a few blankets but such deals are typically negotiated on behalf of the govt by some very expensive international lawyers. Maybe Swiss…some of the toughest negotiators around I’m told. Perhaps Doc has had some experience with them.
peakyeast on Fri, 13th Jan 2017 6:35 pm
There is a great difference between the local government getting money and the local people benefitting from it – especially in Africa.
I, of course, don’t know if that is going to be the case here. But the past probably IS a good indicator.
http://www.kaieteurnewsonline.com/2016/01/31/corruption-too-entrenched-in-guyana-dr-hinds/
Go Speed Racer on Fri, 13th Jan 2017 6:41 pm
If we wipe all of them out with smallpox, then we won’t have to pay them anything.
peakyeast on Fri, 13th Jan 2017 6:50 pm
@GSR: You think too small… MENA, S.America, Asia and, of course, Russia at the same time.
Welcome to a new round of boom bust.
peakyeast on Fri, 13th Jan 2017 6:51 pm
-N
rockman on Fri, 13th Jan 2017 6:52 pm
Racer – Yep, 95′ of oil pay isn’t impressive: there have been 300′ thick reservoirs found. But not enough info to judge. For instance that reservoir might only be 95′ think in the well but there much more important metrics. One is the “column height”. A quick and dirty lesson: picture a hill (subsurface geologic trap that looks like a hill in cross section. Now picture a 95′ thick band that sits on top of the hill. But the hill is 2,000′ tall from the top to the bottom and that 95′ band runs all the way to the bottom. Now replace the band with a 95′ layer of sandstone containing oil. Now you have a 2,000′ “oil column”. Now imagine a second hill that’s only 40′ high: now you only have a 40′ oil column.
Second critical metric: how big is that 2,000′ tall hill? Does it cover 1,000 acres or 10,000 acres? We calculate reserves based on acre-feet of rock volume: 1,000 ACS X 95′ = 95,000 ac-ft. And 10,000 ACS X 95′ = 955,000 ac-ft. A very nice reservoir might produce 600 bbls per ac-ft. So 95,000 ac-ft X 600 bbls/ac-ft = 57 million bbls of oil. And 950,000 ac-ft X 600 bbls/ac-ft = 570 MILLION BBLS OF OIL.
So same 95′ of oil pay and 57 mm bbls or 570 million bbls. Companies will often report how thick the reservoir is but often hold back the important details. IOW a press release saying a company found X’ of pay don’t mean sh*t one way or the other. LOL.
rockman on Fri, 13th Jan 2017 6:57 pm
Peaky – “There is a great difference between the local government getting money and the local people benefitting from it…”. And that’s an issue between the citizens and their govt and not XOM…right? Just like how you benefit from the many $BILLIONS in fossil fuel royalities the US govt receives, right?
Subhranshu ganguly on Fri, 13th Jan 2017 7:00 pm
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Subhranshu ganguly on Fri, 13th Jan 2017 7:00 pm
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peakyeast on Fri, 13th Jan 2017 7:20 pm
@Rock: Yep – I totally agree with you. XOM is not the problem nor has any right to intervene and prevent that.
Actually if XOM did intervene and tried to make it fair – then I feel rather sure the “racist imperialistic corporate-terrorist” shitstorms would really pick up against them.
peakyeast on Fri, 13th Jan 2017 7:30 pm
@Rock: Have no worries. I do not feel any animosity towards the oil sector in general.
But I do find that the management responsible for decisions that lead to the GOM catastrophe should be hanged publicly. – Even if it was an accident and simply to make the point that accidents of that size is completely unacceptable.
rockman on Sat, 14th Jan 2017 1:55 am
Peaky – “XOM is not the problem nor has any right to intervene and prevent that.” And now I’ll do a 180° turn on you. And use my personal experience in Equatorial Guinea, an island nation off the west African coast. Run by a homicidal dictator with 99% of the population living in poverty. A nation with one of the highest per capita incomes IN THE WORLD. Yes, not just Africa but the world. And XOM is one of a number of foreign companies delivering those big royalty payments to El Presidente (former Spanish colony). Not something XOM can brag about, eh? But how about the US and EU govts? Been a while but the oil exports were being split by those parties when I worked there. BTW a few years ago El Presidente amended their constitution: he can now “legally” execute any citizen without a trial. The logic: God talks directly to him (a very Catholic country). So if its OK with God no one should complain.
So who is culpable for this horrible inequality? XOM? The US/EU govts that know exactly what’s going on? The citizens of those countries that don’t know about the EG govt but if they did wouldn’t likely make a fuss about it?
Obviously there are lot of injustices in the world. And lot of it ignored by folks benefiting from it. Everyone in the US can agree the Venezuelan people are being poorly served by their govt. A govt that received $25+ BILLION from oil exports last year. With much of that oil refined in the US with gasoline ending up in our vehicles. So how guilty should we feel? Or should the problems of the Venezuelan people be fixed by the Venezuelan people?
No, there no obvious/easy answers.
rockman on Sat, 14th Jan 2017 1:56 am
“But I do find that the management responsible for decisions that lead to the GOM catastrophe should be hanged publicly.” As do every oil patch hand.