Exxon Adds Two More Promising Wells to its Growing Guyana Portfolio
On Wednesday, ExxonMobil announced two promising discoveries at new test wells in its prolific Stabroek block lease area off Guyana.
The Fangtooth-1 well, located about 11 miles from the Liza field, hit about 160 feet of high-quality oil-bearing sandstone reservoirs. The Lau Lau-1 well, about 42 miles southeast of Liza, encountered about 315 feet of high-quality sandstone reservoirs.
These discoveries add to Exxon's existing recoverable resource estimate for the block, which currently stands at 10 billion barrels of oil equivalent (BOE).
Fangtooth was drilled by the Stena DrillMAX, and Lau Lau was drilled by the Noble Don Taylor. In total, there are six drillships conducting exploration and development drilling across Exxon's three blocks off Guyana.
“Initial results from the Fangtooth and Lau Lau wells are a positive sign for Guyana and continue to demonstrate the potential for the country’s growing oil and gas sector,” said Mike Cousins, senior vice president of exploration and new ventures at ExxonMobil. “Both discoveries increase our understanding of the resource, our continued confidence in the block’s exploration potential, and our view that the many discoveries to date could result in up to 10 development projects."
Those development projects are well under way, and if fully realized, they could become Exxon's largest single development region - far outstripping production in the company's Permian Basin backyard in Texas. The first FPSO for Guyana, Liza Destiny, began operations in 2019, but it encountered serious technical issues beginning in early 2021. After several months of attempted repairs, Exxon went public with its concerns about the design's performance, which it described as "below ExxonMobil’s global expectations for reliability."
The second facility, Liza Unity, is undergoing hookup and commissioning after arriving in Guyanese waters in October 2021. The Unity is on track to start production in the first quarter of 2022 and has a target of 220,000 barrels of oil per day at peak production.
The hull for the Prosperity FPSO, the third project on the Stabroek block, is complete and topside construction is on track for startup in 2024. Planning and permitting applications for the fourth project, Yellowtail, have been submitted for government and regulatory review.
The projects are the first ever oil and gas developments off Guyana, and the activity is turbocharging the small country's economy. More than 3,200 Guyanese are now employed in supporting activities, and ExxonMobil and its contractors have spent more than $540 million with local companies since 2015.
These are annual night light heat maps showing Guyana's economic growth between 2012 (left) and 2021; a year after oil production began offshore. The oil revenue is helping this developing nation expand its societal infrastructure. Oil production is still very modest. #OOTT pic.twitter.com/yOkTtXuuUD— TankerTrackers.com, Inc. (@TankerTrackers) January 4, 2022
ExxonMobil is the Stabroek block's operator and holds a 45 percent interest. Hess holds 30 percent and CNOOC holds the remaining 25 percent. The government will reportedly receive about 15 percent of the proceeds, a share highly favorable to Exxon's interests, according to critics. Questions about Guyana's capabilities for a timely pollution-control response in the event of a blowout have also been raised.