ExxonMobil’s Chief Executive Officer (CEO) Rex Tillerson, confirmed on Wednesday the company’s commitment to exploration and said this year’s deep-water oil discovery off Guyana would be “easily” viable for development at today’s prices.
The ExxonMobil’s top brass was at the time addressing the Oil and Money conference, currently being held in London, United Kingdom with the participation of executives from major oil and gas companies from across the world.
Held under the theme ‘Boom, Bust and Beyond: Strategies for Survival’, Tillerson used the forum to downplay the reduction in frontier exploration by some majors companies and pointed to its discovery off Guyana, which was announced in June and holds resources estimated at 800 million to 1.4 billion oil equivalent barrels.
The fundamentals of long-term demand for new resources, equivalent to “five Saudi Arabias” over the next 25 years, justified continued exploration, he said.
The ExxonMobil CEO did use the opportunity to point to the lack of a supply chain in Guyana, but countered saying it was something the industry was experienced in overcoming and would deal with.
“We’re going to continue… the vibrant exploration programmes that are identifying new large resource opportunities,” Tillerson said.
“Yes [Guyana] is a deepwater development, but I can tell you that development is very viable at today’s prices, easily. We already know so much in terms of how to develop these kinds of resources and we’re taking advantage of market conditions,” Tillerson said, referring to ExxonMobil and its partners in Guyana, US upstream company Hess and China’s state-controlled CNOOC.
“The fact that it is greenfield, it’s in a nation that has little to no capacity to produce anything that we need and so on, we have learnt how to do this.”
The resource estimate for the find offshore Guyana follows the much-watched drilling of the Liza-2 well, the second exploration well in the Stabroek block, which ExxonMobil operates with a 45 per cent stake.
The well found more than 190 feet (58 metres) of oil-bearing sandstone reservoirs after drilling to 5475 metres in 1692 metres of water.
In announcing recently that ExxonMobil’s exploratory well offshore Guyana named SkipJack had turned up dry, the company said it will continue with plans to develop the Liza well with its declared capacity of approximately one billion barrels and also look for other possible targets for drilling.
The SkipJack was spud on July 17, 2016, but turned up dry.
ExxonMobil’s Liza 3 spud on September 4 and, like its predecessor Liza 2, the well will focus on testing the flank of the Liza structure to determine the aerial extent of the reservoir.
Liza 2 hit more than 190 feet of net pay and caused ExxonMobil, along with partners Hess and CNOOC subsidiary Nexen, to boost their estimate of the recoverable oil in place at Liza to 800 million to 1.4 billion barrels of oil equivalent.
In July, ExxonMobil submitted a development plan for Liza to Guyana’s Environmental Protection Agency to begin the environmental review process.
That plan calls for a pair of rigs to drill development wells from two drill centres, each with a corresponding water injection site to the East.
Production will be sent to an FPSO with capacity of around 100,000 barrels of oil per day.
Under that plan, first production from the field would come online sometime in 2020 or as late as 2021.