Exxon Mobil Strikes Oil at Uaru-2 Offshore Guyana

The Exxon Mobil Corp.-led consortium behind the exploration drive offshore Guyana has added more recoverable resources with news April 27 of another oil discovery in the bountiful Stabroek Block.

The Uaru-2 well, located about 6.8 miles south of the Uaru-1 well and north of the Red Tail discovery, hit about 120 ft of what Exxon Mobil described as high-quality oil-bearing reservoirs including new intervals below Uaru-1. The well, drilled in 5,659 ft of water, marks the 19th discovery in the block for Exxon and partners Hess Corp. and China’s CNOOC Ltd.

“The Uaru-2 discovery enhances our work to optimally sequence development opportunities in the Stabroek Block,” said Mike Cousins, senior vice president of exploration and new ventures at ExxonMobil. “Progressing our industry-leading investments and well-executed exploration plans are vital in order to continue to develop Guyana’s offshore resources that unlock additional value for the people of Guyana and all stakeholders.”

The company did not say how much resources the Uaru-2 discovery added to the previous estimate of about 9 billion barrels of oil equivalent in the block.

Uaru-2, the first announced discovery since Redtail in September 2020, followed a couple of exploration disappointments for Exxon offshore Guyana. These included the Hassa-1 exploration well’s failure to hit hydrocarbons in primary target reservoirs and a noncommercial discovery at Bulletwood on the nearby Canje Block.

The rare misses, however, are far outnumbered by the exploration hits.

The operator and its partners continue to push farther into development of their massive pool of discovered resources that have solidly put Guyana on the map as an oil producer.

“We expect to have at least six FPSOs on the Stabroek Block by 2027, with the potential for up to 10 FPSOs to develop the current discovered recoverable resource base,” Hess CEO John Hess said in a separate statement.

If sanctioned and approved by Guyanese authorities, the Yellowtail and Redtail fields will together become the consortium’s fourth development on the block with startup expected in 2025.

First oil is expected for the third development, Payara, in 2024. The $9 billion development will utilize the Prosperity FPSO, for which the hull is complete with topsides construction underway, Exxon said. Targeting a resource base of an estimated 600 million barrels of oil equivalent, plans include ten drill centers with up to 41 wells, about half being production wells.

Meanwhile, Liza Phase 2 is on track to start up in early 2022 using the Liza Unity FPSO, which has a production capacity of about 220,000 barrels of oil per day. Plans for the $6 billion project include six drill centers with about 30 wells, including 15 producers, nine water injection wells and six gas injection wells.

“These new projects continue to drive investment in the Guyanese economy,” Exxon said. “More than 2,300 Guyanese are now supporting project activities on and offshore, which reflects a more than 20 percent increase since the end of 2019. ExxonMobil and its key contractors have spent approximately US$388 million with more than 800 local companies since 2015.”

The consortium’s first development, Liza Phase 1, went onstream in December 2020 utilizing the Liza Destiny FPSO. A minor leak in the flash gas compressor discharge silencer curtailed production for several days in mid-April, forcing production down from the 120,000 bbl/d nameplate capacity reached in first-quarter 2021.

However, “production has since ramped back up and is expected to remain in the range of 100,000-110,000 gross barrels of oil per day until repairs to the discharge silencer are completed in approximately three months,” Hess said. “Following this repair, production is expected to return to, or above, nameplate capacity.”

Holding a 45% interest, Exxon affiliate Esso Exploration and Production Guyana Ltd. operates the 6.6 million-acre Stabroek Block. Partners Hess Guyana Exploration Ltd. and CNOOC Petroleum Guyana Ltd. hold interests of 30% and 25%, respectively.