For the most part, ExxonMobil has been saying that its discoveries on the Stabroek Block have been of light, sweet crude. But comments made recently by one of its partners, Hess Corporation, also indicate that the block holds large amounts of heavy oil.
Hess Corporation’s Chief Executive Officer (CEO), John Hess made this known at the 2019 Global Energy Conference where he gave the keynote address on Perspectives on Global Oil Outlook.
During the question and answer segment, the official was asked if investors should be worried about ExxonMobil’s discovery called Hammerhead which extends into the Orinduik Block.
The reason for concern stems from preliminary tests which show that Jethro and Joe discoveries on Orinduik contain heavy oil which is less valuable on the world market.
But the official said that the market has nothing to be concerned about. He reminded that to date, ExxonMobil, which is the operator of the block, has drilled three wells in the Hammerhead area and would not have done so if it was not deemed commercial.
He reminded too that the Stabroek Block is equivalent to 1,150 Gulf of Mexico blocks and on such massive real estate, there were 14 successful discoveries with only two dry holes to date. Because of this expansive exploratory work, he noted that the partners have a very good understanding of the real estate it is working in. It was on this premise that the CEO disclosed that the block has heavy oil.
The CEO said, “…As you go into the shallow waters, Hammerhead is an indicator of this, the oil is definitely heavier. But what we have there is a pretty big tank of oil and…That is going to be a commercial development. Plans are going ahead with that. The specifics of that I can’t get ahead of …”
Hess added, “…In the way the geology of the block works…as you go inboard, the oil tends to get heavier. That’s the case with Hammerhead. And so, it doesn’t surprise me that even more inboard, Tullow has a heavier outcome.”
Further to this, the CEO said that the oil in Hammerhead is not only heavier than what is contained in Liza Phase One but also that in Phase Two and its potentially third field development project, Payara. “…But at the end of the day, it is very much commercial,” the CEO added.
Berenberg Bank, one of the world’s largest multinational investment banks, has already stated that Exxon’s Hammerhead discovery in the Stabroek Block holds 800M net recoverable resources, with the Orinduik Block operator poised to cash in when production comes on stream.
(To hear the details of the Hess CEO comments see attached link –play from 36: 11mins: https://www.veracast.com/webcasts/baml/energy2019/id36104195314.cfm#/player/html5/speed/a8)
