ExxonMobil’s dive in Guyana’s waters pays off
— 9 months to first oil
DPI, Guyana, Monday, July 8, 2019
To date, ExxonMobil estimates that is has found more than 5.5 billion oil-equivalent barrels at the Stabroek Block with potential for at least five Floating Production, Storage and Offloading (FPSO) vessels which could produce more than 750,000 barrels of oil per day by 2025.
According to a report from OilNOW – a local oil and gas news site, “It is with this optimism that the company is gearing up for first oil at the Liza Phase 1 development project.” It was highlighted that the 13 discoveries made by ExxonMobil, thus far, does not only bode well for the small South American nation, but also for ExxonMobil – the company that commenced exploration in Guyana at a time when it seemed like making a discovery would be a long-shot.
OilNOW interviewed Geoscience Upstream Manager at ExxonMobil Guyana, Doug McGehee who reflected on the risks involved in the company diving exploration activities offshore Guyana.
While their success is being praised, McGehee explained that it was not guaranteed, as Guyana is a frontier area.
“In a frontier area, there is not an established petroleum system. In order to have a successful petroleum system, you need seven things. You need source rock, which means its rock that has organic material in it so that can become hydrocarbons… plants and animals basically,” the article quoted him as saying.
“It needs to be matured, so it needs to be buried deep enough, long enough and get hot enough to actually generate hydrocarbons from it. Then, if you have those two things, you still don’t have an active petroleum system. You need a reservoir. So, you need a rock that has pore space that allows the oil to go into the pore space of the rocks. Then, you need a trap and a seal. It doesn’t do any good for that reservoir if that oil just flows through that reservoir and never trap it anywhere and shows up as a seep somewhere,” McGehee was quoted in the article as saying.
The Geoscience Upstream Manager shared that “the sixth element is the oil needs to leave the source rock” while the final element is timing, saying, “Your reservoir and trap have to be in place before the oil migrates. So, all seven of those things have to come together. So, when we talk about a frontier area, it’s an area where those things have not been proven.”
Before the company drilling the Liza-1 well, several other companies had unsuccessfully conducted exploration activities. Moreover, before ExxonMobil drilled the Liza 1 prospect, there were already 40 dry holes from exploration conducted by other companies, the article noted.
A dry hole is a well that is drilled but does not yield commercial quantities of oil.
According to the article, McGehee disclosed that ExxonMobil conducted a “bunch of regional work and we kind of rethought how all the plate tectonics came together and how all these basins were formed”. The seismic data available then was not very promising, but they went ahead with their exploration, it added.
In May 2015, ExxonMobil announced its first discovery—800 million to 1.4 billion barrels of light crude at Liza 1.
According to the OilNOW article, the risk that they took came with a heavy price tag, and without this discovery, the company would have faced heavy losses. “In a production sharing agreement, the contractor—us—takes all the risk. When I talk about risk, I’m not talking about safety risk, I’m talking about financial risks. So, we could invest millions to billions of dollars looking for oil and if we don’t find any, we don’t get anything back…that is money spent,” McGehee was further quoted in the article as saying.
“We spend that money upfront, the Government does a Production Sharing Agreement and if we don’t find any oil or have production development, we don’t get anything back,” he stated.
More on this story can be read on OilNOW where this information was first published.