ExxonMobil now believes Stabroek Block has more than 18 billion barrels

Mar 07, 2021 News

…to get in excess of 20% rate of return on Guyana spending
…plans to continue flaring for another decade

Kaieteur News – With 18 discoveries to date and another five exploration wells planned for the near future, ExxonMobil Corp. is now revising the potential oil reserves in the Stabroek Block, to be at least 18 billion barrels of oil—double the proven nine billion barrels already discovered.
This, according to Neil Chapman, ExxonMobil’s senior vice president of upstream operations, during a recent webcast, where the company’s executive elucidated on the ramping up of operations in Guyana even as its production globally is projected to remain ‘flat’ at least until 2025, he told the Investor’s Day 2021 webcast on Wednesday last.
Chapman told ExxonMobil investors, “we expect the potential of the basin to be more than double what we’ve already discovered,” or more than 18 billion barrels of oil.
According to Chapman, it’s possible that 10 Floating Production Storage and Offloading (FPSO) vessels, “will be needed to develop the resource we’ve discovered so far.”
He noted that production in the Permian Basin in the United States is expected to be ramped up 700,000 barrels of oil per day by 2025, “assuming favourable market conditions” using eight rigs—down from 57 rigs that was being used during the past year.
This projection, according to Chapman, has had to be revised downwards from the initial planned production of one million barrels of oil from 2024 in that basin.
Contrasting the US and Guyana operations, Chapman said that the partners working in the Stabroek Block envisions even more production from the Stabroek Block than in the Permian Basin at about 750,000 barrels per day from five FPSOs by 2026.
This, in addition to a planned sixth Guyana project, scheduled to begin producing by 2027 from the Stabroek Block.
Notably, Chapman in his presentation underscored that the Guyana projects aim also to deliver a more than 10 percent rate of return, “and potentially more than 20 percent, at an oil price less than $35 per barrel.”
A rate of return references the net gain or loss of an investment over a specified time period, expressed as a percentage of the investment’s initial cost.
ExxonMobil and its partners in the Stabroek Block—Hess Corp and China’s National Offshore Oil Company (CNOOC)—have so far claimed to have invested some US$20B so far in the Stabroek Block.
Oil prices have since rebounded to US$70 per barrel with an upward trajectory in prices in light of OPEC’s decision to limit global production.
Chapman in his presentation also committed the company’s operation to reach a target of zero flaring by 2030, confirming routine flaring for at least another nine years. ExxonMobil currently in Guyana operates the country’s offshore Stabroek block, which produced the country’s first oil in December 2019.
The block ramped to peak first-phase output in the fourth quarter of 120,000 barrels of oil per day although two additional projects are under development that will begin production in 2022 and 2024, respectively. Those projects will utilize FPSOs with capacities of 220,000 barrels of oil per day.