ExxonMobil encounters rare drilling setback in Guyana

ExxonMobil encountered a rare setback after five years of drilling in the prolific waters off Guyana.

The Tanager-1 well, the first that the US major drills on the Kaieteur block, "encountered hydrocarbons but based on initial analysis it does not appear to be economic on a stand-alone basis," the company said.

Tanager-1, spudded 11 August, reached a depth of 7,633m (25,043ft).

"We will evaluate the data we have gained through additional tests and analysis," the company said. "We will continue exploration across our acreage offshore Guyana, including in the high-risk frontier areas such as the Kaieteur and Canje blocks."

ExxonMobil started crude production at the Liza 1 well on the deepwater Stabroek block in December 2019. Output is projected to reach 750,000 b/d by 2026, compared with around 105,000 b/d in early November.

ExxonMobil operates Stabroek with a 45pc stake. Its partners are US independent Hess with 30pc and Chinese state-owned CNOOC unit Nexen with 25pc.

ExxonMobil holds a 35pc operating stake in Kaieteur that lies north of Stabroek. Its minority partners are Canada's Cataleya Energy and Israel's Ratio Energy holding 25pc each, and Hess with 15pc.

ExxonMobil also operates Canje with a 35pc stake. The block is adjacent to and east of Stabroek. Its partners are France's Total with 35pc, Canadian junior JHI Associates with 17.5pc and local firm Mid-Atlantic Oil and Gas with 12.5pc.

ExxonMobil is using four drillships in Guyana.

"We expect to drill our first well on the Canje block by early 2021," ExxonMobil told Argus. "A fifth and a sixth drill ship will support our plans for exploration, appraisal and development wells across the three blocks."

By Canute James