Exxon finds big oil field 100 miles offshore from South America

Fuel Fix:

U.S. oil companies Exxon Mobil and Hess have confirmed the largest oil discovery in two years off the coast of Guyana, in a field that could cost as much as $18 billion to develop.

The deep-water Liza field, more than 100 miles from the small South American country, could hold as much as 1.4 billion barrels of oil equivalent, making it one of a handful of billion-barrel discoveries in the last half-decade. Exxon first found oil in the Liza field in 2015, when it drilled its first well there, but a second well found the potential for twice as much crude, the company said Thursday.

It’s a big score for an industry that has made sharp cutbacks in oil exploration and last year found less energy than any year since 1952.

“It is getting harder and harder to make large oil finds,” said Leta Smith, a director at consultancy IHS. “One of the things that has been troublesome over the past several years is each year we see fewer discovered volumes, since 2012. A lot of the big finds have been gas, rather than oil.”

The industry has only made five discoveries with more than 500 million barrels or larger in the past four years. In 2014, a discovery in Iraq had 1.6 billion barrels.
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At current prices the field is profitable.  Guyana is just east of Venezuela, the mismanaged socialist country which has large reserves that it is unable to exploit because of the failure of its command economy.

Exxon's strategy has been to find the big fields around the world rather than take advantage of the shale plays in the US.  They certainly found a big one in this case.