After a third dud, ExxonMobil has abandoned current drilling efforts in Brazil’s deepwater acreage, according to a Wall Street Journal report.
WSJ’s sources indicate that Exxon has shifted geologists and engineers from Rio de Janeiro to its other prospects in Guyana, Angola and Canada. No tenders have been issued to drilling contractors for works in Brazil since April 2022 and Exxon skipped out on Brazil’s most recent offshore auction in December.
WSJ said the move marks a “major setback” for Exxon, as it promoted Brazil as a key source of growth for years. Chief Executive Officer (CEO) Darren Woods had referred to Brazil as a key part of its portfolio of low-cost supply developments, alongside its golden egg – Guyana.
Brazil has become one of a dwindling number of places around the world where large oil companies still spend money to search for oil. Despite some companies’ recent struggles to find oil there, it is currently the hottest market for offshore drilling rigs, led by state-owned Petrobras.
But future projects have not been completely ruled out. WSJ noted that Michelle Gray, Exxon spokeswoman said the company remains engaged in Brazil and will still continue exploration activities. Exxon would consider drilling in the equatorial margin off northern Brazil, far from its current leases further south.
Exxon ventured to Brazil six years ago after snapping up shares in its offshore acreage with partners for US$4 billion. In 2021, it drilled two wells in Brazil’s Campos and Santos basins. Last year, it drilled a third in the Sergipe-Alagoas basin. None had enough oil to be commercially viable.
And the failure is a stark contrast to Exxon’s success in Guyana. It has racked up a resource count of 11 billion barrels with just two production projects online.