ExxonMobil’s new oil discovery off Guyana comes with potential to underpin future development

ExxonMobil’s new oil discovery off Guyana could underpin future development

U.S.-headquartered energy giant ExxonMobil has made a significant new oil discovery at the Stabroek block, which boosts the block’s hydrocarbon resources, fortifying the oil major’s existing portfolio of extensive development opportunities offshore Guyana.

Stena Carron; Source: Stena Drilling

The new oil discovery, made at the Fangtooth SE-1 well on the Stabroek block, was disclosed on Wednesday, 25 January 2023, by ExxonMobil’s partner on the block, Hess Corporation. The Stabroek block covers 6.6 million acres (26,800 square kilometres) and is operated by ExxonMobil’s affiliate Esso Exploration and Production Guyana with a 45 per cent interest. The company’s partners in the block are Hess Guyana Exploration (30 per cent), and CNOOC Petroleum Guyana (25 per cent).

According to Hess, the Fangtooth SE-1 well encountered approximately 200 feet of oil bearing sandstone reservoirs. This well was drilled in 5,397 feet of water by the Stena Carron drillship. ExxonMobil’s new discovery is located approximately 8 miles southeast of the original Fangtooth-1 well, which had encountered around 164 feet of oil bearing sandstone reservoirs.

Hess confirmed that further appraisal activities were underway, highlighting that Fangtooth would add to the Stabroek block’s gross discovered recoverable resource estimate of more than 11 billion boe. The firm further underscores that this has the potential to underpin a future oil development on the block.

The new discovery adds to the continued exploration success offshore Guyana, as ExxonMobil has made over 30 discoveries on the block since 2015. The U.S. oil major’s first two sanctioned projects off Guyana are Liza Phase 1 and Liza Phase 2, which are producing above design capacity and are currently operating at a combined gross production capacity of more than 360,000 barrels of oil per day (bopd).

ExxonMobil’s third project, Payara, is on track to come online by the end of 2023 with a gross production capacity of approximately 220,000 bopd, using the Prosperity FPSO. The U.S. player’s fourth project, Yellowtail, is expected to be on stream in 2025 with a gross production capacity of roughly 250,000 bopd, using the ONE GUYANA FPSO.

In addition, ExxonMobil submitted for approval a plan for a fifth development, Uaru, to the government of Guyana in the fourth quarter. Pending the government’s approvals and project sanctioning, this project is expected to have a capacity of approximately 250,000 gross bopd with the first oil anticipated at the end of 2026.

A few months ago, Japan’s MODEC secured a FEED contract for Uaru FPSO. The firm will design and construct this FPSO based on its M350 newbuild design, which will be able to produce 250,000 barrels of oil per day, will have an associated gas treatment capacity of 540 million cubic feet per day, and a water injection capacity of 350,000 barrels per day.

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ExxonMobil plans to have at least six FPSOs with a production capacity of more than 1 million gross barrels of oil per day online on the Stabroek block in 2027, with the potential for up to 10 FPSOs to develop gross discovered recoverable resources.