Westwood: Exxon’s new discovery opens new 10 billion barrel oil province

Energy intelligence group Westwood takes a closer look at Guyana following ExxonMobil’s ninth offshore discovery in the country.

Westwood said on Wednesday that the latest Guyana discovery opened the way to a new 10 billion barrel oil province and transformation for one of South America’s smallest countries.

On August 30, Exxon announced the ninth discovery in Guyana at the Hammerhead-1 well, adding to the resource base of 4 bboe found since the Liza discovery in 2015.

Hammerhead-1 is located approximately 13 miles (21 kilometers) southwest of the Liza-1 well and follows previous discoveries on the Stabroek Block at Liza, Liza Deep, Payara, Snoek, Turbot, Ranger, Pacora and Longtail.

Liza is expected to be onstream in 2020 and, according to Westwood, there is potential for Guyana to reach 750 thousand barrels a day by 2025.

“The significance of Hammerhead is that it opens a new play in sandstone reservoirs of Tertiary age, younger and distinct from the previously successful Cretaceous aged reservoirs in the Liza sandstone play and Ranger carbonate plays.

“The new Tertiary play opens the pathway for the emergence of a possible 10 billion barrel plus province, second only in its scale as a new emerging province this century to the Pre-Salt of Brazil,” Westwood added.

This scale of resource could support a plateau production level of over a million barrels a day for a decade or more.

It is very important to say that the oil-rich Guyana has a population of only 800,000 people while Brazil has over 200 million.

One million barrels a day of production would equate to 456 barrels per citizen per year, which would make Guyana the world’s biggest per capita oil producer. At $70/barrel this level of production would generate $32,000 per capita of gross annual oil revenue, before costs and oil company profits.

“With a current GDP per capita of $4,750, Guyana faces an extreme transformation in its fortunes,” Westwood claimed.

The opportunities for Guyana and the challenges it faces are huge in equal measure and its peer top 10 per capita oil producers, such as Kuwait, the UAE, Norway, Equatorial Guinea, and Gabon are ones they can learn lessons from – for better and for worse.

The intelligence group added that the oil companies in Guyana, especially Exxon, CNOOC, and Hess must work out their role in supporting the transformation of resources of this scale into sustainable development.

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