Oil and gas discoveries at the ExxonMobil-operated Stabroek Block are estimated to hold approximately 11 billion barrels of oil-equivalent. The resource base has positioned the South American country among the world’s fastest-growing oil producers and continues to shape development plans across the sector.
Proven oil reserves are a key part of how that development unfolds. They help determine how much of the discovered oil can be produced with reasonable certainty using current technology and economic conditions.
In the petroleum industry, resources refer to estimates of oil and gas that could potentially be recovered from a discovery based on geological and engineering data. These estimates are made after exploration wells confirm the presence of hydrocarbons in a reservoir.
Proved reserves represent the portion of those resources that can be produced commercially once a development plan is approved and financing is secured. This distinction is important because it determines what volume of oil can be counted toward future production.
How oil reserves are discovered and proven
Oil reserves are discovered and confirmed through a sequence of exploration and appraisal activities offshore. Companies first identify prospects using seismic surveys and geological studies. Exploration wells are then drilled to confirm whether oil and/or gas is present.
After a discovery is made, appraisal work is conducted to determine the size and characteristics of the reservoir. This includes drilling more, collecting data and assessing how the field can be produced.
Once a project is sanctioned and the required infrastructure is funded, part of the resource is converted into proved reserves. This step confirms that the oil can be produced under the approved development plan.
According to Alistair Routledge, President of ExxonMobil Guyana, resources are based on estimates made during exploration and drilling.
“Resource is estimated as ultimately recoverable. When we drill a well, and we penetrate a reservoir, and we say, we think there’s this amount of resource that we could recover from that reservoir, but it is founded on several assumptions,” he said during a press conference on March 19 at ExxonMobil’s operational center at Ogle, East Coast Demerara.
Geological certainty regarding what is commercially recoverable enables the company to classify the resource as reserves when the project is sanctioned.
“It doesn’t move to proved until you fund a project that can develop that resource,” he added.
The company’s investment decisions, along with that of its co-venturers, come after a government’s regulators issue project approvals.
Approved developments such as Uaru, Whiptail and Hammerhead form part of the block’s expanding reserves portfolio. These projects involve drilling production wells, installing subsea equipment and deploying floating production vessels to extract oil from deepwater reservoirs.
Each sanctioned development increases the volume of oil that is classified as proved reserves and supports continued growth in offshore production.
Routledge explained that reserve updates often follow new project approvals. He pointed to the role of the Hammerhead development in adding to reserves, for example. He shared that when the Hammerhead project was approved, the company’s share of the project’s resources would be counted as “proved” reserves for them as the project is developed.
He said estimates can change as new data is gathered through appraisal and production.
“On the estimated ultimate recovery, it’s still, you know, close to 11, it’s somewhere in that vicinity. But…as we continue to do appraisal work and we produce reservoirs and we gather data, there’s, you know, puts and takes as we go through that assessment.”
Why oil reserves matter for Guyana
Oil reserves help determine production levels, project lifespans and investment planning across the sector. They also influence how companies and the government forecast future activity in the offshore basin.
Reserves also provide greater certainty for investors and project partners, helping to sustain exploration and development efforts in the Guyana-Suriname Basin.
