Offshore basins often produce additional discoveries years or even decades after an initial discovery. Guyana’s Stabroek Block is a good example. As ExxonMobil further evaluates the natural gas potential of the Stabroek Block, there is increasing focus on what the next phase of development means for a country that has already been dramatically impacted by oil.
A basin founded on continued discovery
ExxonMobil initiated its work offshore of Guyana in 2008 and found the first breakthrough well, Liza-1, in 2015, which encountered 295 feet of high-quality oil-bearing sandstone. This was followed by a rapid succession of finds (Payara, Snoek, Turbot, and Ranger) confirming Stabroek as one of the most prolific deepwater blocks in the world.
Although most of the early appraisals focused on oil, the Minister of Natural Resources, Government of Guyana, states that Exxon is currently working with State technical teams to assess how many barrels of associated and non-associated gas the Stabroek Block contains. Exxon states that it will share recoverable volumes of gas only once a separate gas development is sanctioned.
In addition to more than 11 billion barrels of oil equivalent that have been identified as present across the entire Stabroek Block, the identification of large volumes of gas can potentially develop a second, independent energy sector in the country.
Indications exist that this is developing into a mature gas opportunity
The evidence exists that gas development is becoming increasingly attractive. Exxon has described the first proposed gas-and-condensate project — Longtail — which is anticipated to begin producing non-associated gas by 2030. Longtail is designed to maximize the recovery of liquids while injecting gas back into the reservoir to maintain the reservoir pressure; this design is optimized for deepwater geology.
Alistair Routledge, President of ExxonMobil Guyana, stated that the consortium is anticipating approval to proceed with a second offshore gas project located in the southeastern part of the Stabroek Block acreage, where studies are presently underway to quantify the resources in place and to understand their commercial viability.
Meanwhile, the Guyanese government is considering how gas could provide fuel for new industrial sectors — fertilizer manufacturing, electricity generation, and data center operations — similar to those of other regional gas economies. Multiple companies have reportedly indicated their interest in purchasing gas over a long-term period, provided a new pipeline to Berbice is authorized.
Routledge emphasizes that developing a gas-based economy requires three things:
- Confidence in the magnitude of the resources.
- Onshore infrastructure to support the development of the gas fields.
- A common investment plan among all parties involved in the development of the gas economy.
A strategy dependent upon unlocking additional acreage
Exxon is continuing to evaluate the potential of deeper geological zones and areas within the Stabroek Block that are subject to force majeure as a result of the border dispute between Guyana and Venezuela. A favorable judgment from the International Court of Justice could potentially lead to access to approximately 30% of the Stabroek Block, currently denied to Exxon, and potentially allow for new gas-rich zones to be evaluated.
Given the numerous oil developments already sanctioned and multiple others currently in process, gas represents the next major step in the evolution of the Stabroek Block.
Exxon’s evaluations suggest that there is both geological interest and a strategic intent to build a fully-integrated gas value chain in one of the world’s fastest-growing hydrocarbon provinces. If Exxon’s evaluations confirm significant volumes of gas, Guyana could enter a new era – one characterized not only by growing oil output, but by the establishment of a diverse, gas-powered industrial economy. As Exxon continues to evaluate the potential for gas in the Stabroek Block, the foundation is being established for a long-term transformation of the country’s energy future.
