Guyana is becoming increasingly important to ExxonMobil’s portfolio and could account for 7 percent of its overall production by 2027.
Tom Ellacott, Senior Vice President, Corporate Research at Wood Mackenzie says the South American country “is really going from strength to strength” and the eight oil discovery announced by ExxonMobil last week further cements its place as a major emerging oil producing nation.
“Just to put a bit of perspective on how important Guyana is to Exxon, it could account for 7% of its overall production…peak in 2027, so it really is starting to be very material. It’s one of their top growth engines. What I would also say is that it fits the box from a portfolio perspective,” he said in a Wood Mack podcast published on June 25.
Guyana, the analyst said, is an asset that works well at low prices. “It makes a 10% return let’s say $5 a barrel and it is also very attractive at higher prices so you are assuming $85 a barrel very attractive IRL (investment return level). If you look at the other partners…it’s even more material. So Hess for instance peak production in Guyana could account for 40% of their overall production so it really has absolutely transformed their long term outlook, and then CNOOC as well, much bigger company…about 16% at their peak production.”
ExxonMobil announced its eighth oil discovery offshore Guyana at the Longtail-1 well on June 20. This new oil find creates the potential for additional resource development in the southeast area of the Stabroek Block, the company said.
Wood Mack estimates that total recoverable reserves in the Stabroek Block now stand at 4 billion barrels of oil and projects that daily production will hit 700,000 bpd at peak, by 2027.