Guyana New Oil Discovery Is Just The beginning For Exxon Mobil

Guyana New Oil Discovery Is Just The beginning For Exxon Mobil

OilWith successful drilling of a deepwater exploration along the coastline of Guyana. The country is self-assured to become the next big oil producer in the Western Hemisphere attracting big oil companies in and investors.

The estimate from Exxon Mobil offshore oil discovery in Guyana has been updated by 25%, it is a conservative number as exploration of 8 out of 10 wells have produced oil since 2015.

To further their exploration Exxon Mobil has identified 19 other sites to drill, according to Wood Mackenzie. Exxon is running two drill ships to focus along the coast of Guyana in hope to find more oil.

There is a potential multi-billion barrel of oil under the ocean floor. The estimation of the reservoir is 1,000 times bigger than the average Gulf Mexico block.

Total, Tullow Oil and Repsol are also exploring in Guyana’s water but have not yet find anything substantial Exxon is currently forecasting.

Exxon has determined that the exploration area called Stabroek alone holds at least 4 billion bbl of reserves. It would be enough to push Guyana above OPEC-members like Equatorial Guinea and Gabon, half of Angola production at 750,000 bpd by 2025. Moving Guyana just below Libya’s 2017 oil production.

Exxon’s Neil Chapman, management-board member, called Guyana a “fairy tale” discovery at the company’s analyst day in March. That’s in part due to timing.

The government has announced earlier this year its intention to build a $500 million refinery plant on Crab Island it is an enormous investment for one of the poorest countries in the region. The plant will begin producing around 2020 and export most of its oil.

This new discovery is one more indication that South America is becoming a critical supplier to world oil markets. Brazil and Colombia are already producers, Argentina is moving forward in the same direction as Chevron and several other international companies are pledging to invest at least $5 billion this year and billions more in the years to come.