On 30 August 2018, ExxonMobil announced its ninth discovery offshore Guyana. The Hammerhead-1 well encountered 197 feet (60 meters) of oil-bearing sandstone in a Miocene formation. It is the third play unlocked by ExxonMobil and partners Hess and Nexen in the prolific Guyana basin after seven discoveries in Cretaceous-aged turbidite sandstone reservoirs and a discovery in Late Cretaceous carbonate reservoirs in early 2018 with Ranger.
ExxonMobil’s exploration success in the last few years has established the Guyana basin as one of the world’s offshore exploration hotspots. Accounting for 15% of all conventional crude found globally since 2015, no other area has delivered as much conventional oil resource.
Commenting on the ExxonMobil-led consortium announcement of its latest offshore Guyana discovery, Maria Cortez, Latin America upstream senior research manager with Wood Mackenzie said: "Guyana is set to create the greatest value of any offshore basin since the downturn. ExxonMobil's latest discovery, Hammerhead is another play-opener and adds to more than 4 billion barrels of oil equivalent of reserves through an exploration programme with a success rate that now stands at 82%."
With an impressive success rate and almost 18 prospects left to chase in the Stabroek block, the project will only get bigger. Top players have picked up acreage across the basin and along the wider Equatorial Margin.
"But this is high risk exploration, and there are development challenges that range from building the required infrastructure to ensuring good natural resource governance," Ms Cortez added.
Moreover, although Guyana’s portion of the Guyana basin is set to create the greatest value of any offshore basin in the Americas, the country must overcome several challenges and risks to reap the full benefit of this oil windfall. Priorities include developing the institutional and regulatory framework to effectively manage the emerging sector, plus possibly setting up a sovereign wealth fund.
"Guyana has hit the jackpot," Ms Cortez said. "If this small South American nation with, a population of about 750,000, can properly manage the billions of dollars of revenue about to come its way, it may become the richest corner of the continent."