ExxonMobil Makes Another Oil Discovery at Guyana's Stabroek Block

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) announced the first oil discovery in the prolific Stabroek block asset for this year, and the company's chief executive officer discussed Chevron Corporation's (NYSE:CVX) (San Ramon, California) acquisition of Hess Corporation (NYSE:HES) (New York, New York).

ExxonMobil announced in March that it had found oil at the Bluefin site in the Stabroek block in Guyana, making it the first discovery of this year. The company did not announce the recoverable oil reserves of Bluefin, but highlighted that it encountered roughly 60 meters (197 feet) of hydrocarbon-bearing sandstone at 1,294 meters (4,244 feet) of water.

This new oil discovery is located about 8.5 kilometers from the Sailfin-1 well, in the southeastern section of Stabroek.

"Our exploration program continues to improve our understanding of the block's potential to drive viable oil-and-gas development. This latest find reinforces that we have the people, skills and technology to safely and responsibly deliver value to Guyana from the country's resources," said Alistair Routledge, president of ExxonMobil Guyana.

With Bluefin, the company has made over 30 discoveries in the Stabroek block since 2015. So far, the energy asset, which is controlled by a consortium led by Exxon (45%), Hess (30%) and CNPC (25%), has proven reserves of over 11 billion barrels.

Since the start of production in 2019, the consortium has ramped up production at the Stabroek block to about 645,000 barrels of oil per day (BBL/d), according to media outlets. The company projects an output of 1.2 million BBL/d by 2027.

Despite the news, Stabroek is not shielded from tensions and controversies. This week, Exxon Chief Executive Officer Darren Woods said during CERAWeek that the company is not trying to acquire Hess amid the latest disputes regarding the Chevron-Hess US$53 billion acquisition.

The comments emerge following Chevron's efforts to buy Hess to get a foothold in Guyana. Exxon, however, is claiming a right of first refusal under a joint operating agreement and has escalated the dispute with Chevron at the International Chamber of Commerce.

Through the arbitration, Exxon could be looking to buy Hess' share of the Stabroek block to retain control of the asset.

On the other hand, the Stabroek block's limits lie in the disputed waters between Guyana and Venezuela. In recent months, the governments of the neighboring nations have heightened border tensions. However, it seems that recent dialogue between the administrations has helped to calm down the parties after heated exchanges between the presidents.

In early March, the presidents of both nations met for a second time in the Caribbean during the CELAC conference, where they reiterated their efforts to find a peaceful solution to the border dispute.

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