The Stabroek Block offshore Guyana is being referred to by one expert as one of the most successful exploration blocks of all time, with an unparalleled success rate after 33 oil finds were recorded in the block by ExxonMobil between 2015 and 2022.
Making this assertion was Schreiner Parker, the Senior Vice President and Head of the Latin America Division for Rystad Energy, an independent Norwegian consultancy specialising in energy research and market intelligence.
Parker is currently in Guyana, and had a sit down with the media on Wednesday. According to a presentation he shared, Rystad estimates the value of the Stabroek block to be at US$41 billion. This is compared to the valuation across the peer group Guyana is in, which ranges from US$24 billion to US$55 billion.
“The Stabroek block has been one of the most prolific exploration blocks of all time. And if measured on exploration success rate, it probably does not have an equivalent in the world,” Parker said.
“Typically, exploration success rate is about five per cent. Meaning every five exploration wells drilled, only one encounters pay. That has not been the case in Stabroek. There have been very few dry holes drilled, versus actual commercial discoveries.”
According to Parker, Exxon’s level of success in the Stabroek block has not yet been replicated by Exxon and other oil companies in other blocks in Guyana’s waters. He noted that of the four oil discoveries outside Stabroek, only one has commercial potential… although there has been talk by the Orinduik partners of revisiting one of the wells, Jethro, and its commercial viability.
“We know that Jethro and Joe both had uncommercial lines for a number of different reasons. So, I think there are some questions about the commerciality outside of Stabroek. But certainly, Exxon and the other block owners are going to continue exploration efforts outside of Stabroek,” Parker explained.
When asked how much of Exxon’s success in the Stabroek block is attributable to the company’s use of technology and deep-sea drilling practices, Parker noted that it was a lot. At the same time, he made it clear that the Stabroek block also speaks for itself.
“If you look at Shell, which was previously a partner in the Stabroek block and decided to leave, they didn’t believe in the prospects and the potential Stabroek had. And I think it speaks to the fact that Exxon is one of the top deep-water operators in the world, and has a technical understanding that is almost unmatched… it’s a company that has always been run by geologists and engineers. And they were able to see something that others weren’t able to see.
“But, of course, the basin speaks for itself. And the amount of resources that is here, it’s phenomenal, but the fact that Exxon has been able to, in a short space of time, both have the success they have had and also go from discovery to first oil in a small amount of time does speak to them as an operator and their technical prowess,” Parker said.
The oil rich Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
So far, Exxon’s total investments in Guyana is Gy$1.3 trillion on its own, and over Gy$3 trillion with its partners. Additionally, the joint-venturers’ exploration and production plans up to 2025 would likely increase their investments to more than Gy$6 trillion.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027, with developmental drilling having been recently started on the second one, the Liza Phase 2 project. Production has already started in the second phase, with the Liza Utility floating, production, storage and offloading (FPSO) vessel in operation.
The third project – the Payara Development – will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.
Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will turn out to be the single largest development so far in terms of barrels per day of oil, with a mammoth 250,000 bpd targeted. (This story was first published in the Guyana Times)