Guyana's Environmental Regulator Okays 35 New Oil Wells

Wednesday, July 5, 2023

Guyana's environmental regulator on Wednesday granted an Exxon Mobil-led consortium approval to drill 35 new offshore exploration and appraisal wells as the group looks to expand its production successes in the South American country.

The wells will be drilled within the group's 6.6 million acre (26,800-sq km) Stabroek offshore block, where more than 11 billion barrels of recoverable oil and gas have been discovered. The consortium, which includes U.S. oil firm Hess and China's CNOOC last year earned about $5.8 billion from Guyana production.

The new drilling "can be conducted in accordance with good environmental practices, and in a manner that avoids, prevents and minimizes any adverse effects which could result from the activity," Guyana's Environmental Protection Agency (EPA) said in a statement.

The U.S. EPA did not immediately reply to a request for further comment.

The South American country is in talks with the Exxon group to relinquish about 20% of unexplored territory within Exxon's blocks. The group has identified the areas to be relinquished.

Exxon has said its oil and gas drilling will continue even if reduced by any relinquishment. The license for the Stabroek offshore block required the group to give back a share of unexplored territory this year, but Guyana gave the group an extension to 2024 on the give-back.

"The project is being developed to discover new and re-evaluate existing recoverable hydrocarbons from reservoirs in the Stabroek Block, thereby enabling potential future development projects," Exxon said.

The new drilling campaign is planned to begin in the third quarter of 2023 and could extend through 2028, Exxon said.

Guyana so far has approved five of the consortium's projects, which combined are expected to produce more than 1 million barrels of oil and gas by 2027. Guyana has earned over $2 billion in royalties and profit oil earnings from the projects.

(Reuters - Reporting by Kiana Wilburg; Editing by David Gregorio)

Categories: Deepwater Drilling Activity South America

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