Exxon’s bid in Guyana’s first licensing round shows potential of basin – Rystad Energy

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Shikema Dey
Experienced Journalist with a demonstrated history of working in the media production industry and a keen interest in oil and gas, energy, public infrastructure, agriculture, social issues, development and the environment.

The mere fact that ExxonMobil threw its bid in the ring for Guyana’s first offshore licensing round governed by more stringent fiscal terms speaks to the potential of South America’s hottest prospect. That point was offered by the Managing Director for Latin America at Rystad Energy, Schreiner Parker, during an exclusive interview with OilNOW. 

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Exxon holds operatorship of the 6.6 million acre Stabroek Block, and the Kaieteur and Canje Blocks as well. 

“Exxon is not just satisfied with the block that they are sitting on, which is the most prolific exploration block in history, but they actually want to go out and get more acreage even if it is at different terms than they were able to secure in the Stabroek Block. I think that was a huge vote of confidence in the bid round,” he said. 

The prospectivity of the Guyana Basin is deepened further by the fact that the bid round attracted interest from big names like TotalEnergies and QatarEnergy, Parker pointed out. Total already has stakes in three blocks: Canje, Kanuku and Orinduik but it does not hold operatorship. 

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“I think that really those two coming together [in a consortium] to bid, shows that this is a serious bid round with serious acreage that could produce serious results after the exploration campaigns are wrapped up,” he noted. 

Some notable absentees in this context include other majors like Shell and Petrobras and according to Parker, the rationale behind their absence can be attributed to the immense value of the opportunities in Brazil. 

Both Shell and Petrobras have made substantial investments, both in terms of financial and human capital, in their Brazilian holdings. Parker explained that these investments primarily center around the pre-salt polygon, an area known for its economically viable and environmentally friendly production characteristics. This parallels the kind of production potential observed in Guyana, characterized by low breakeven costs and minimal carbon emissions. 

“So, the acreage that Shell and Petrobras are sitting on there in Brazil…I think their thinking was really we have got this huge resource right now, that is of equivalent nature, let us focus our capital expenditure on developing the Brazilian assets.” Parker said.

Petrobras had expressed an interest to bid but later pulled out. The reason, as explained by Guyana’s Vice President, Dr. Bharrat Jagdeo, at a June press conference, aligns with Parker’s rationale. Jagdeo said that the Brazilian state-owned firm instead chose to focus its exploration efforts offshore in the Atlantic, east of Guyana, within Brazilian territory. The target, located in the deep waters of Amapá, offshore Brazil, is known as the Brazilian Equatorial Margin and is thought to hold nearly five billion barrels worth of oil as it has similar geology to the Guyana basin, where ExxonMobil has discovered a rich pool of hydrocarbons.

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