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Page added on July 2, 2016
Huge Discovery For Hess, Exxon; $70 Billion At Current Prices
Later, 7:45 p.m. Central Time: this ExxonMobil – Guyana story is getting a lot of press. This may be quite a story:
ExxonMobil and its partner Hess Corp. have announced that the major discovery off the coast of Guyana, is a discovery that is much larger than previously expected.
The Liza field could turn out to be the largest oil discovery reported in two years and the companies say that it could cost $18 billion to develop.
Exxon describes it as a “world-class discovery with a recoverable resource of between 800 million and 1.4 billion oil-equivalent barrels.” That could amount to as much as half of the entire volume of oil discovered across the entire industry in 2015.
Yesterday this post:
XOM, Guyana. An “elephant find”? ExxonMobil says the company plans to release the results of the Liza-2 well “by mid-year.” According to an analyst, if the headlines prove accurate, Liza-1 and Liza-2 could confirm meaning reserves and production uplift for ExxonMobil and its partners well above the initial industry reserve estimates of 700 million bbls of oil. Data points:
- Liza-1, Stabroek Block, 120 miles offshore Guyana
- the seam is 295 feet thick
- oil-bearing sandstone
- 17,825 feet in almost 6,000 feet of water
- spud March 5, 2015
- Esso and Production Guyana (45%); Hess Guyana (30%), CNOOC Nexen Guyana (25%)
Note the initial industry reserve estimates: 700 million bbls of oil.
Now, yesterday, Bloomberg reports that the discovery may be twice as large as thought:
Exxon Mobil Corp.’s oil discovery off the coast of Guyana may hold as much as 1.4 billion barrels, twice the size of the previous estimate, making it worth as much as $69.5 billion based on current prices.
The Liza field 120 miles (193 kilometers) from the coast of Guyana is a “world-class discovery” that probably will yield the equivalent of 800 million to 1.4 billion barrels of crude.
Hess Corp., a partner in the field, will see a a 39 percent boost in current proved reserves at the upper end of the estimate.
The Liza discovery may not add to global oil supplies for years as deepwater finds can take half a decade or more to bring into production.
It’s an enormous discovery for Hess. At the high end of the estimate, the New York-based company’s stake equates to 420 million barrels, a 39 percent addition to proved reserves.
Note: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read at this site or what you think you may have read at this post. I honestly do not know if I bought shares in Hess this past year. It seems I did based on activity in the Bakken and the ethane story, but I really don’t recall. I do not have a history of investing in Hess, but I may have made an exception this past year. Because I don’t plan to buy or sell any equities any time soon, I won’t check. I have a rule (which I frequently break) to not check my on-line portfolios if I don’t plan to do any buying or selling.
From the EIA today:
Three fossil fuels—petroleum, natural gas, and coal—have provided more than 80% of total U.S. energy consumption for more than 100 years. In 2015, fossil fuels made up 81.5% of total U.S. energy consumption, the lowest fossil fuel share in the past century.
In EIA’s Annual Energy Outlook 2016 Reference case projections, which reflect current laws and policies, that percentage declines to 76.6% by 2040. Policy changes or technology breakthroughs that go beyond the trend improvements included in the Reference case could significantly change that projection. — EIA
15 Comments on "Huge Discovery For Hess, Exxon; $70 Billion At Current Prices"
shortonoil on Sat, 2nd Jul 2016 7:48 pm
Ghawar came in at 75 Gb, and has since produced 85. The savior of the world this isn’t!
Roger on Sat, 2nd Jul 2016 7:58 pm
Good news indeed! That said, we’ll need a lot more. 1B bbls is about 10 days of current consumption. Here’s to those who are trying…good luck!
Go Speed Racer on Sat, 2nd Jul 2016 8:28 pm
Turn up the tunes, and lead-foot your Corvette on that rural highway, get it up to 120 mph, yeee haww we got another 10 days of oil supply !! Head on into town, to get me a gallon of milk, a case of motor oil, and a burger and a root-beer float.
Rick Bronson on Sat, 2nd Jul 2016 8:38 pm
What is the API (quality) of this Oil. We will know later. If its heavy then it will sell at a heavy discount.
Plantagenet on Sat, 2nd Jul 2016 8:59 pm
I’m surprised anybody is still doing offshore exploration at these low oil prices.
frankthetank on Sat, 2nd Jul 2016 9:35 pm
Just another reason to leave the pickup idling in the driveway overnight.
Dustin Hoffman on Sat, 2nd Jul 2016 10:20 pm
Yep, love it when I’m at Publix Supermarket and I see a monster pickup truck parked in a handicap space with the a/c full blast as the motor idles high.
Needless to say, sitting in the drivers seat is someone that is 20 years younger than me and moves a lot better.
Next visit to the Doctors office, I’m get to me one of those myself!
Heck, we just got another 10 days supply of petro! Got to take advantage of it while we can!
makati1 on Sun, 3rd Jul 2016 12:58 am
But..But…But! Can it be recovered at a PROFIT? THAT will determine if it ever gets to market. Not how much might actually be there.
Go Speed Racer on Sun, 3rd Jul 2016 1:18 am
Oh hell ya, a monster truck all decked out in military camo, the engine idling so that the air conditioner keeps running. The occupants buying birthday cake and helium balloons, and Chinese fireworks to celebrate the greatness of the USA. Can it be much longer before reality punches them in the nose?
Kenz300 on Sun, 3rd Jul 2016 9:47 am
Climate Change is real….it will impact all of us……and future generations even more……………
Koch Brothers Continue to Fund Climate Change Denial Machine, Spend $21M to Defend Exxon
http://ecowatch.com/2016/06/22/koch-defends-exxon/
Big Coal Funded This Prominent Climate Change Denier, Docs Reveal
http://www.huffingtonpost.com/entry/roy-spencer-peabody-energy_us_57601e12e4b053d43306535e
bug on Sun, 3rd Jul 2016 12:02 pm
Go, when reality punches them in the nose, they will blame it on someone or something else, not their moronic lifestyle choices.
Dustin Hoffman on Sun, 3rd Jul 2016 2:27 pm
Shortonoil, wondering about recovery rates of fields. New technology can boast to 35% or even more to 45%. Perhaps with nanotechnology this an exceed these percentages….any limits to what an oil field can be squeezed?
Any thoughts? Thank you before you respond.
Survivalist on Sun, 3rd Jul 2016 9:06 pm
Wow. A week or two of world consumption. That a super giant by today’s standards of recent discovery. It seems that every year or two they discover a weeks worth.
JuanP on Sun, 3rd Jul 2016 11:17 pm
Guys, Barrels of oil equivalent (whatever the fuck that may be) are NOT barrels of oil and resources are NOT reserves. This may amount to nothing at all or maybe a few minutes worth of fish farts! LOL!
wildbourgman on Mon, 4th Jul 2016 4:05 pm
This is a big deal to the companies involved I know that first hand. I’ve had representatives for one of the partners say that they would should down every project that they were involved with and cut all other cap-ex just to remain in this project. Management would lay everyone off that wasn’t involved in the Guyana project if need be. So To Exxon and the partners this is a very big deal and saying all that it’s not very much oil in the big picture. That says a lot too!