Could Exxon's Mega Discovery Be a Boon for Offshore Development?

The global economy may be in the midst of an oil price slump, but in the wake of a potentially game-changing discovery, the outlook is looking bright for ExxonMobil. Off the coast of the South American nation of Guyana, Exxon has made one of the biggest oil discoveries in recent history. While the region has next to no links with the petroleum industry, the discovery could see it emerge as a major exploration destination for oil and gas majors.

Exxon strikes gold in Guyana

So what’s all the fuss about? In July, Exxon confirmed that its Liza-2 site was sitting on 190 feet of oil-bearing sandstone. Located offshore, the well is the second successful project drilled in the region. While originally analysts put the figure at 700 million barrels, the latest discovery has drastically boosted this estimate. Thanks to Liza-2, Exxon and its partners estimate that the Guyana prospect could house up to 1.4 billion barrels of oil. If this prediction comes to light, the region would emerge as one of the most lucrative discoveries of the decade.

The beginning of the offshore revival?

For Guyana, the economic benefits will be fast, and fierce. For the region as a whole, the discovery could open up new economic opportunities for neighbouring nations such as Suriname and French Guyana. On a global scale, the success of the Liza-2 project could be hugely influential. It highlights the rewards of offshore exploration, and could fast-track the re-emergence of this paradigm within the oil and gas sector.

Over the past five years offshore drilling has been overshadowed by onshore projects and fracking ventures. But given the recent oil price collapse, majors such as Shell are maintaining that offshore drilling is now a keynote area of focus. Exxon’s success in Guyana crystallises these attitudes, and will likely help to accelerate the offshore revival. In hindsight, this comes as no surprise. A return to the deep means bigger targets, and greater ROI for companies whose budgets have been left reeling in the aftermath of the global oil price crash.

Offshore drilling may be on-track to regain popularity, but the green energy revolution could quickly disrupt its renaissance. ‘Can fossil fuels and green energy work hand-in-hand?’ explores whether or not the two can co-exist, with expert commentary from Professor Dr. Gioia Falcone, Head of the Oil and Gas Engineering Centre at Cranfield University.