ExxonMobil yet to update Stabroek Block resource after 19 months

Nov 14, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – After 19 months since its last update, ExxonMobil’s silence on updating the Stabroek Block’s resource count is stirring questions and concerns.

The company’s last resource count update, dated April 26, 2022, declared the recoverable resource for the Stabroek Block at nearly 11 billion oil-equivalent barrels, following discoveries at the Barreleye-1, Patwa-1, and Lukanani-1 wells. However, since then, Exxon has announced seven more significant discoveries, yet the resource count remains unchanged.

In 2022, subsequent to the April update, Exxon announced four more discoveries at the Stabroek Block – at the Seabob-1 and Kiru-Kiru-1 wells in July, followed by discoveries at the Sailfin-1 and Yarrow-1 wells in October. Moving into 2023, Exxon continued its successful exploration streak with discoveries at the Fangtooth SE, Lancetfish-1, and Lancetfish-2 wells. The Fangtooth SE well, particularly notable as an appraisal well of the Fangtooth-1 discovery, is part of consideration for ExxonMobil’s seventh Stabroek Block development.

Despite these advancements, ExxonMobil has maintained the same resource estimate. This lack of update has been repeatedly brought up in earnings calls and press conferences. During the 2023 third quarter earnings call, Doug Leggate, a Bank of America Merrill Lynch analyst, pointedly raised this issue with Exxon officials. He referenced past statements by Exxon, which has suggested Exxon’s future well targets are likely to result in a doubling of the 10 billion barrels in proven resource announced earlier.

The oil-rich Stabroek Block is controlled by ExxonMobil

Responding to the inquiry about why there hasn’t been an update despite the numerous significant finds, Neil Chapman, Exxon’s Senior Vice President, stated, “We continue to integrate those results, both of exploration and appraisal drilling, and we’re going to update that resource base when we see it is a significant change.” This response, often repeated in various forms, is vague and lacks clarity, particularly in light of the substantial discoveries made post-April 2022.

Adding to the confusion, Hess, Exxon’s partner in the Stabroek Block, appeared to set a different insight in late 2022. During a presentation at the Bank of America Securities 2022 Global Energy Conference, Hess’ then CEO, John Hess spoke of a “major upgrade” to the Stabroek Block resource base, once the discoveries made in 2022 are incorporated. However, since this statement, the Stabroek Block partners seem to have diverged from this narrative.

The continued delay in updating the resource estimates, despite clear evidence of significant discoveries, raises questions about whether ExxonMobil and its partners are being transparent, and whether stakeholders can trust the accuracy of the information currently being shared with the public. With the company’s resource count stagnant at 11 billion barrels despite new findings, for 19 months, stakeholders and analysts are left wondering: What is ExxonMobil hiding?