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Brazil dud: ExxonMobil Misfires

Read Time: 2 mins

US supermajor ExxonMobil has hit a duster with the drilling of its maiden exploration well in the ultra-deep waters of the Sergipe-Alagoas basin offshore Brazil.

According to project partner Enauta, drilling of the Cutthroat-1 wildcat in Block SEAL-M-428 did not result in a discovery.

“Although the occurrence of hydrocarbons in this well was not verified, the consortium will conduct complementary studies, incorporating sampled date into its regional geological interpretation, and update its vision as to the exploration potential of the blocks located in the Sergipe-Alagoas basin ultra-deep waters,” said Enauta.

ExxonMobil used the Seadrill drillship West Saturn in the campaign in more than 3000 meters of water.

US independent Murphy Oil, which holds a 20 percent working interest in the permit, has previously suggested Cutthroat-1 could hold between 500 million and 1.05 billion barrels of oil equivalent in gross resource potential.

The partners have mapped as many as 11 other prospects to be drilled in the nine licenses they hold in the Sergipe-Alagoas basin, but no more exploration drilling is expected for this year.

Cutthroat-1 was keenly watched by the industry as, in case of success, would likely extend the hydrocarbons play discovered by state-controlled giant Petrobras to the east.

Petrobras is currently developing six fields in Sergipe-Alagoas with plans to deploy two floating production, storage, and offloading vessels in the region.

ExxonMobil has been betting heavily on South America for the past decade, and while the company had a tremendous success in neighboring Guyana, unlocking so far over 10 billion barrels of oil equivalent in the prolific Stabroek block, the same has not yet happened in Brazil.

In an ill-fated wildcatting campaign that ran from 2008 to 2010, ExxonMobil drilled the Azulao-1, Guarani-1 and Sabia-1 wells in Block BM-S-22 at the heart of the Santos basin pre-salt province.

That exploration drive was happening at the same time Petrobras was making a series of huge oil discoveries at nearby tracts, but the trio of wells drilled by ExxonMobil proved to be non-commercial and the license was later relinquished.

ExxonMobil then quit the Brazilian upstream sector for a few years until it made a return in 2013 in the country’s 11th licensing round by acquiring two exploration blocks.

After that, ExxonMobil decided to inject more capital in subsequent Brazil rounds, increasing its acreage position to 28 blocks–including a dominant position in the deep-water portion of the Sergipe-Alagoas basin – and prepared a bold exploration campaign targeting wells in both pre-salt and post-salt horizons.

In 2021, the company drilled the Opal-1 well in the Campos basin and the Tita-1 probe in the Tita production sharing contract, and both appear to have been non-commercial.

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