ExxonMobil seeks a combination of attractive geology, stable political conditions and the potential to minimise its carbon footprint in the production process, says its Exploration Chief John Ardill. Guyana, with its crown jewel – the Stabroek Block – has all three and has become Exxon’s benchmark when pursuing new exploration frontiers.
“A lot of thought goes into an upstream investment because these things last for decades. Are they the right molecules in the right place with the right carbon intensity and if those questions are all yes, then they will find a path to development. Not, in many cases, very quickly. If there are question marks around those… it is going to be a harder path,” he pointed out in an interview with S&P Global.
Ardill told S&P that the company used Guyana as a benchmark for exploration in Africa. He explained that as seen there, oil has the capacity to rapidly generate revenue and will remain vital, particularly where emissions from the production process can be minimised.
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“Oftentimes oil will work almost anywhere you find it at scale. We will always be prioritising oil development first and the reason to do that is we have to establish a revenue stream to pay for this investment. This is tens of billions of dollars, and we need to see revenue out of that quickly to sustain that ongoing investment,” he said.
The Exxon Exploration Chief was keen to note that the world is not opportunity-limited but “investment capacity limited” so what investors look for is to see whether they can find the right elements in a specific region to “incentivise investment.”
“The question is, can we find those high-quality rocks, commercial framework, and fiscal [conditions] to incentivise investment? And the threshold for that investment is ever higher,” Ardill added.
And that is what Exxon finds in Guyana.
Its Liza crude is of good quality, with low breakeven costs. And its stable political climate makes it a prime destination for investment. This remains an important point for the Guyana government.
Exxon made its first discovery in Guyana back in 2015 and had made impressive, record-breaking progress to date. Two projects in progress, a third about to start up, and two more in the pipeline. Its recoverable resource count stands at close to 11 billion oil-equivalent barrels.
