After years of failing to make a major oil discovery offshore Brazil, ExxonMobil has ended a major drilling campaign there, but hasn't ruled out further exploration in the country, The Wall Street Journal reported on Wednesday, citing sources with knowledge of the plans.
Exxon, the first oil and gas company to set up operations in Brazil in 1912 under the name of Standard Oil Company of Brazil, bought deepwater acreage back in 2017, hoping to find oil in the prolific offshore basins where other majors and Brazilian state oil firm Petrobras have found huge oil reserves.
Exxon, however, hasn't been successful in its years-long exploration campaign and has ended that campaign, according to the Journal's sources.
In 2021, Exxon drilled two wells in the Opal and Tita blocks. According to Brazilian oil industry regulator ANP, Exxon found traces of oil and gas in the Tita block, Bnamericas reported in November 2021. Exxon paid the equivalent of $560 million to secure a majority stake in the block in a tender held in 2018.
Exxon and partners have spent $4 billion on securing drilling rights in blocks offshore Brazil in tenders over the past five years. Yet, the supermajor has not made that one major discovery that would lead to sanctioning a project to pump oil.
The drilling setback is rare for Exxon, which struck so much oil offshore Guyana, which borders Brazil to the north, that it helped make it the latest oil-producing and oil-exporting nation in late 2019.
Despite the end of the Brazilian drilling campaign, Exxon has not given up on exploration offshore the country.
"We continue to work with our co-venturers to analyze the data acquired from the extensive drilling program to assess the potential for future exploration activities in those blocks," Exxon's spokeswoman Michelle Gray told the Journal.
In December, Exxon said in its latest corporate plan that more than 70% of capital investments by 2027 would be deployed in strategic developments in the U.S. Permian Basin, Guyana, Brazil, and LNG projects around the world.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More