Guyana: ExxonMobil finds oil in controversial waters

This article appeared in Vol. 12, No. 4 - 2016


President Nicolas Maduro of Venezuela recently claimed sovereignty over much of Guyana’s territorial waters in the Atlantic Ocean, coincidentally shortly after the announcement of the Liza discovery. One of the most exciting things happening in terms of Latin America exploration right now has been the discovery of oil by ExxonMobil in the deep waters off Guyana. The company’s Liza-1 wildcat, located in 1,743m of water, is the first to be drilled in the Stabroek Block. Reaching a total depth of 5,433m, it encountered 90m of high quality oil-bearing sands in an as yet undeclared formation, although the source rock is thought to be Cenomanian Turonian. It is unclear if the well was tested. The company is now working to determine the commercial viability of the discovered resource, as well as evaluating other resource potential on the block. Esso Exploration and Production Guyana Ltd holds 45% interest, Hess Guyana Exploration Ltd 30% and CNOOC Nexen Petroleum Guyana Ltd 25%.

In 2012, the United States Geological Survey ranked Guyana as having the second most attractive under-explored basin in the world, with a potential of 15.2 Bbo.

One potential snag is that neighboring Venezuela has long claimed about two-thirds of Guyana’s territory as well as the offshore area where ExxonMobil drilled this well. The Liza-1 discovery is in uncontested waters, but part of the Stabroek block extends into territory claimed by Venezuela. Guyana’s new government has attacked a decree by Venezuelan President Nicolas Maduro, which it said seeks to annex Guyanese maritime space in the wake of an oil discovery. The decree creates a theoretical new ‘defense’ zone offshore that would leave the former British colony with little direct access to the Atlantic.


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