Exxon’s phenomenal success in the Stabroek Block can see the operator making a multi-billion-barrel addition to the already discovered 11 billion oil-equivalent barrels, once its exploration success keeps pace with what it has been, to date. Over the last eight years, the company has discovered an average of almost 1.4 billion oil-equivalent barrels per year. At this rate, it could potentially unlock another 5 billion barrels of oil-equivalent before its license expires in October 2026.
Hess Corporation President and Chief Operations Officer, Greg Hill highlighted the expiration date during Hess’ first quarter earnings call on April 26.
“We’ve got multibillion barrels of upside. The license expires in October of 2026,” Hill stated.
The expiration date is in accordance with the 10-year exploration period facilitated by the 2016 Stabroek Block Petroleum Agreement. The period is divided into an initial phase of four years, and two renewal phases of three years each. The contractor gets an opportunity to relinquish the entire Block after the end of each phase, save and except for discovery areas, but kept the complete acreage – no doubt – due to its outstanding exploration success there.
Hill outlined the Stabroek Block co-venturers’ plans for the next few years. “We will take the next four to five years to fully understand that potential and get it locked down,” he said. “So I think you should think about three wells — three exploration rigs a year pretty much going through 2026. And we can drill usually about 10 or so exploration and appraisal wells a year.”
There are always risks and uncertainties when it comes to oil exploration. But with the Stabroek Block having proven itself to be a lucrative asset for Exxon, the partners continue to see multi-billion-barrel potential. Currently, Exxon is on the tailend of a 25-well drill campaign in the Stabroek Block, and has applied to the Environmental Protection Agency (EPA) of Guyana for authorisation to drill 35 more exploration wells.
The Stabroek PSA was initially signed in 1999, then updated in 2016, following the worldclass Liza discovery of May 2015. ExxonMobil’s success in Guyana has made Stabroek one of the hottest exploration sites in the world in recent years. Since then, the company has made more than 30 commercial discoveries of oil and gas. With the potential to have 10 projects producing simultaneously, Exxon has received approval for five projects so far and is well on track to meeting its goal of producing over 1.2 million barrels of crude per day (bpd) offshore Guyana by 2027.
