South America continues to be a major player in the global arena for deepwater discoveries, with Guyana pushing big volumes and massive potential finds remaining. According to Norway based Rystad Energy, the South America/Caribbean region was the clear winner with 31% of the new volumes, keeping the top spot for a second year thanks to success in Guyana and Suriname, as well as some discoveries in Brazil and Trinidad and Tobago. However, discoveries in the region were still about 10 billion barrels of oil equivalent (boe) or 35% below the 2019 level.
U.S. oil major ExxonMobil announced the Uaru discovery in January 2020. The well was drilled in a new reservoir, encountering approximately 94 feet (29 meters) of high-quality oil-bearing sandstone reservoir, and was drilled in 6,342 feet (1,933 meters) of water. This was followed by success at the Yellowtail-2 well which encountered 69 feet (21 meters) of net pay in a newly identified, high-quality oil-bearing reservoir, among the original Yellowtail-1 discovery intervals. The Redtail discovery was announced in September 2020 making it the oil maojor’s 18th oil discovery in the Stabroek Block. The well encountered approximately 232 feet (70 meters) of high-quality oil-bearing sandstone and was drilled in 6,164 feet (1,878 meters) of water.
“The region also led sanctioning activity in 2020, contributing about 30% of the total sanctioned investments as projects in Brazil and Guyana were greenlighted,” Rystad Energy said.
Rystad Energy said the exploration success has had a significant impact on South America’s reserve replacement ratio (RRR). “The region was the only one to replace more than what it produced last year with a RRR of 108% (excluding tight oil and unconventional gas). The second best was Russia with a RRR of 37%, while Europe placed third with 26%. The global RRR ended at about 25% for 2020,” the consultancy group said.
Despite capex cuts and low prices, South America has managed to create significant value through exploration and approve major projects for development, Rystad Energy added.
“The region is expected to continue to lead the recovery of offshore projects with as many as 14 FPSO projects set to enter the development phase by 2023. Exploration activity is also expected to pick up in the region with many high-impact wells and licensing rounds planned in the near future,” Rystad Energy said.
In addition to the Liza Destiny FPSO already producing oil offshore Guyana, two more FPSOs – Liza Unity and the Prosperity – have been approved. Seven more oil production units are also expected to be added by the end of the decade, making it 10 FPSOs for Guyana in a 10-year period.
ExxonMobil has also said it will be targeting over 12 exploration and appraisal wells this year offshore Guyana.