Major discovery declared offshore Guyana

Jun 30, 2016 12:00 AM

A well off the coast of Guyana holds a find that, with as much as 1.4 billion barrels of reserves, is considered transformative, Exxon Mobil said Thursday.

Steve Greenlee, president of the exploration division of Exxon, said a production test at the Liza-2 well in the Stabroek block off the coast of Guyana indicates the presence of between 800 million and 1.4 billion barrels of oil equivalent.

The drill bit ran through more than 190 feet of oil-bearing material in a well drilled in waters about a mile deep.



"This exploration success demonstrates the strength of our long-term investment approach, as well as our technology leadership in ultra, deepwater environments," Greenlee said in a statement.

Last year, Exxon ran through a 295-foot column of oil reserves while drilling an exploration well in the Stabroek reserve area. Exxon is working alongside a subsidiary of U.S. exploration company Hess Corp. and China's Nexxen.

A survey from the U.S. Geological Survey finds the waters off the coast of Guyana may be among the more lucrative oil basins in the world. The mean undiscovered resource potential offshore Guyana was estimated by the USGS at around 15.2 billion barrels.

A May survey from the International Monetary Fund noted that, despite the potential oil wealth, national authorities were taking a "cautious approach" to factoring any possible income from oil into their medium-term financial plans.

Relying for the time being on gold, the IMF said the outlook for Guyana is generally positive, with growth expected around 4 percent this year. Guyana, however, is still exposed to external shocks because it currently depends on oil imports and bases its export revenue on only just a few commodities.

John Hess, the CEO of Hess Corp., said the drilling results should be a source of optimism for all players involved.

"We look forward to working with our co-venture partners and the government of Guyana to move this exciting prospect toward a commercialization decision," he said in a statement.

The Stabroek block is 26,800 square kilometres. Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Nexen Petroleum Guyana Limited holds 25% interest.

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