ExxonMobil’s sixth “home run” oil find on the Stabroek block offshore Guyana in less than three years may not only push estimated recoverable reserves notably higher, but could further whittle down breakeven costs, analysts said Friday.
The Ranger exploration well, announced by ExxonMobil Friday, also opens a new part of the frontier Guyana play, located about 130 miles offshore the South American country, where 3.2 billion boe of recoverable oil equivalent has been found in ExxonMobil’s five prior discoveries – Liza, Payara, Liza Deep, Snoek and Turbot.
Ranger will add to the total, Hess Corp, a 30% partner in the Stabroek block, said separately, without providing an estimate. ExxonMobil holds 45% of Stabroek, and CNOOC Nexen the remaining 25%.
ExxonMobil and Hess could not be reached for comment, but analysts agree that Stabroek appears to hold much more potential.
“Not only are we looking at significantly higher recoverable volumes now than what was known six or eight months ago, but the partners have made achievements with efficiencies and lowering drilling costs,” Matt Blomerth, head of Latin American upstream research for energy consultants Wood Mackenzie, said.
“What is significant is [the] size” of the Stabroek block, which is 6.6 million acres, or 26,800 square kilometers, PIRA Energy analyst Rene Santos said. “This is equivalent to over 1,000 Gulf of Mexico Outer Continental Shelf blocks.”
PIRA, a unit of S&P Global Platts, sees Guyana producing 400,000 b/d by 2030.
First production from Stabroek is expected in 2020. PIRA expects Guyana to produce around 400,000 b/d by 2030, Santos said.
In mid-2017, about the time the Liza project’s Phase One was sanctioned, Wood Mac had estimated breakeven costs for the project at around $46/b Brent. But that is likely now “significantly lower,” Blomerth said.
“We see not just volume increases but cost reductions taking place,” he said.
Ranger, spudded in early November 2017, took less than two months to drill. ExxonMobil and Hess found roughly 230 feet of high quality oil bearing carbonate reservoir, the companies said in separate statements. The well, in 8,973 feet of water, was drilled to 21,161-foot depths.
Ranger follows the Turbot-1 well, announced in October 2017.
Last June, ExxonMobil, CNOOC Nexen and Hess sanctioned the Liza Phase One project, which should begin producing 120,000 b/d by 2020. That will include only the Liza wells and not later discoveries. ExxonMobil has said Phase Two and even Phase Three planning are now underway.
Stabroek resembles a jagged narrow rectangular strip tilted northwest-southeast. Most of the discoveries are sited in the southeast part of the block, although Ranger is situated 60 miles northwest of the Liza development.
Globally, there have been few large discoveries in recent years, Santos said. Notable have been Johan Sverdrup in Norway at 2.5 billion boe and Libra in Brazil at 7.9 billion boe.
But “Guyana is indeed one of the most significant ‘reported’ discoveries in recent years,” Santos said.
ExxonMobil said it could not immediately provide the crude quality of Ranger, although the company in 2016 claimed Liza tests had found 32 degree API gravity oil in that reservoir.
Following completion of Ranger-1, another Stabroek prospect, Pacora, is scheduled to be spudded. Pacora is located 4 miles from the Payara discovery, but the Stabroek partners did not provide more specific geographic points.
They said further exploration drilling is planned on Stabroek in 2018. Earlier statements said that should include another Turbot well. — Starr Spencer, email@example.com — Edited by Annie Siebert, firstname.lastname@example.org