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Exxon Struggles To Make A Large Discovery In Oil-Rich Brazil

U.S. supermajor ExxonMobil has not yet struck the big oil discovery offshore Brazil, although it has spent years and billions of U.S. dollars on securing drilling rights in one of the most prolific offshore basins, Reuters reported on Monday, citing sources with knowledge of recent well drilling results.

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. Exxon paid the equivalent of $560 million to secure a majority stake in the block in a tender held in 2018.  

Exxon was evaluating in November the results of the well but apparently hasn’t found enough evidence to justify graduating to appraisal well drilling, Reuters’ sources now say.

Exxon and partners have spent $4 billion on securing drilling rights in blocks offshore Brazil in tenders over the past five years, per Reuters estimates. Yet, the supermajor has yet to make that one major discovery that would lead to sanctioning a project to pump oil from what other companies have found to be a prolific offshore basin.

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. Since 2015, when it first discovered oil offshore Guyana, Exxon has made more than 20 discoveries in the waters of the South American nation.

Last week, Exxon said it started production at Guyana’s second offshore oil development on the Stabroek Block, Liza Phase 2, bringing total production capacity to more than 340,000 barrels per day (bpd). Production at the Liza Unity floating, production, storage and offloading (FPSO) vessel is expected to reach its target of 220,000 bpd this year, and adds to the more than 120,000 bpd of capacity at the Liza Phase 1 project that launched in December 2019.  

By Charles Kennedy for Oilprice.com

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