Latest Guyana oil find, Argentine initiative underline ExxonMobil consolidation in hemisphere

ExxonMobil’s announcement a week ago that it had   made a new oil discovery offshore Guyana at the Yellowtail-1 well, marking the 13th discovery on the Stabroek Block, was not the only recent indication of the consolidation of its hold on the oil and gas sector in the hemisphere. Just prior to the disclosure of its new Guyana find the global oil giant disclosed that it had increased its holdings in Argentina after its subsidiary, ExxonMobil Argentina Offshore Investments B.V. and an affiliate of Qatar Petroleum won three exploration blocks during Argentina’s first offshore bid round. The award reportedly extends the company’s holdings in Argentina to around 2.6 million net acres. The blocks are reportedly located in the Malvinas basin, approximately 200 mi (320 km) offshore Tierra del Fuego.

The most recent Guyana discovery adds to the previously announced estimated recoverable resource of approximately 5.5 billion oil-equivalent barrels on the Stabroek Block.

 Yellowtail-1 is the fifth discovery in the Turbot area, which ExxonMobil expects to become a major development hub. The company’s Senior Vice President (Exploration and New Ventures) Mike Cousins was quoted as saying that the company’s local successes “can be attributed to our industry-leading upstream capabilities, the strength of our partnerships and our ongoing commitment to growing Guyana’s offshore potential.”

The report on the Yellowtail-1 discovery indicated that the exercise   encountered approximately 292 feet (89 meters) of high-quality oil bearing sandstone reservoir and was drilled to a depth of 18,445 feet (5,622 meters) in 6,046 feet (1,843 meters) of water. The well is located approximately 6 miles (10 kilometers) northwest of the Tilapia discovery. The Noble Tom Madden reportedly began drilling the Yellowtail well on March 27.

In Argentina, ExxonMobil will operate the blocks with 70% working interest while a Qatar Petroleum affiliate will hold the remaining 30%. The initial work programme will reportedly include 3D seismic data acquisition. A resolution will be issued by Argentina’s Secretariat of Energy confirming the public tender results.

ExxonMobil through its subsidiaries in Argentina currently hold interest in approximately 315,000 net acres spanning seven blocks in the onshore Neuquén Basin of the Vaca Muerta formation. The business support centre in Buenos Aires employs approximately 1,700 Argentines in various corporate areas including human resources, information technology and finance.

In Guyana, ExxonMobil is on record as saying that there is potential for at least five floating production, storage and offloading (FPSO) vessels on the Stabroek Block producing more than 750,000 barrels of oil per day by 2025. Startup of the Liza Phase 1 development is on track to begin by the first quarter of 2020 and will produce up to 120,000 barrels of oil per day utilizing the Liza Destiny FPSO, which is expected to arrive in Guyana in the third quarter of 2019.

The Liza Phase Two initiative is expected to commence by mid-2022 with a final investment decision   expected shortly subject to Government of Guyana and regulatory approvals. Sanctioning of a third development, Payara, is also expected in 2019, with startup projected for 2023.

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