Exxon and Hess Make Largest Oil Discovery for Two Years

The oil industry has been reeling for two years, with prices falling from a high of US$115 per barrel in June 2014, and dropping to a record low of under US$35 at the end of February 2016. Though in the wake of a major discovery off the coast of Guyana, the outlook is looking markedly positive for global oil goliaths, ExxonMobil and Hess Corp.

A ‘world class’ discovery

Located in the north of South America, the little known nation of Guyana is home to what Exxon is referring to as the “largest oil breakthrough in two years.” While the costs of developing the site are estimated at upwards of US$18 billion, the Liza field could yield up to 50% of the total oil count that was discovered across the entire industry in 2015.

“Drilling results from the Liza-2 well, the second exploration well in the Stabroek block offshore Guyana, confirm a world-class discovery with a recoverable resource of between 800 million and 1.4 billion oil-equivalent barrels,” reads a press release issued by ExxonMobil.

New horizons for Exxon-Hess alliance

The well is located 120 miles off the coast of Guyana, and marks exciting new opportunities for Exxon. Over the past four years just five discoveries of over 500 million barrels have materialised, with experts asserting that it’s getting harder and harder to hone in on lucrative reserves.

“We are excited by the results of a production test of the Liza-2 well, which confirms the presence of high-quality oil from the same high-porosity sandstone reservoirs that we saw in the Liza-1 well completed in 2015,” comments Steve Greenlee, president of Exxon Mobil Exploration Company. “We, along with our co-venturers, look forward to continuing a strong partnership with the government of Guyana to further evaluate the commercial potential for this exciting prospect.”

The deep-water revival

For the oil industry as a whole, the new discovery reflects the global resurgence of offshore drilling.  Over the past five years onshore projects and fracking ventures have overshadowed oceanic drilling. Yet with colossal targets and greater ROI, a deep-water revival is becoming increasingly likely.

“This exploration success demonstrates the strength of our long-term investment approach, as well as our technology leadership in ultra, deep-water environments,” comments Greenlee.

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