Last year saw an acceleration of the shift from the so-called Golden Triangle deepwater and ultradeepwater theaters of the Gulf of Mexico, Brazil and West Africa, to comparatively unexplored Guyana and neighboring Suriname.

With a well drilled early this year in 6,342’ of water, an ExxonMobil-led partnership now boasts 16 discoveries on the deepwater Stabroek Block off Guyana. ExxonMobil had planned to add a fifth drillship in the second quarter and drill five more exploration wells this year. Together, the discoveries top 8 billion bbls of estimated recoverable reserves.

However, given the repercussions of the coronavirus pandemic, staying on schedule for hooking much of that resource base to the sales line would appear unlikely. Before the pandemic, an FPSO under construction for the second phase of the Liza field development offshore Guyana, with a designed capacity of 220,000 bpd, had been expected to begin production by mid-2022.

Elsewhere, the maturing deepwater Gulf of Mexico is also yielding new frontier exploration plays. With Appomattox, Shell marked the first production from the deepwater Norphlet formation where true vertical well depths can exceed 29,000’. In issuing a Final Investment Decision (FID) for its Green Canyon Anchor development last December, Chevron became the first operator to give the go ahead to a deepwater project with downhole pressures of 20,000 psi and greater. At the same time, Anchor partner Total began front-end engineering and design (FEED) for the French operator's  high-pressure North Platte field in the Garden Banks area, as a prelude to a possible FID next year.

Ongoing development of high-pressure deepwater assets would further tax the availability of robust downhole hardware and rigs. “For the highest specification assets, we see a virtually sold out market for the majority of 2020,” Jeremy Thigpen, president and chief executive officer of offshore drilling rig contractor Transocean, said on Feb. 18. “In fact, we’ve been contacted by customers about bringing additional rigs into the Gulf to meet their demand.”

After years of cost-cutting, standardization, and other measures, deepwater development and operations costs have fallen below $30 bbl, said Chevron chairman and CEO Michael K. Wirth. Deepwater drilling and completion costs have fallen to nearly $10 bbl, he said.

“Anchor is actually south of $20 a barrel, and that includes some investment for new technology that we have to prove out here, because we’re dealing with deeper reservoir, higher reservoir pressures, 20,000 pounds technology and a little bit of additional export pipeline, which is unique to this project as well,” Wirth said in a Jan. 31 earnings call.

Chevron also partnered with Hess in the Esox discovery last October in 4,609 feet of water in Mississippi Canyon. Wirth described the Hess-operated discovery as “a low-cost, high-return tieback, which actually will turn a 2019 discovery into 2020 first oil.”

Meanwhile, hopes of expanding the deepwater Gulf of Mexico’s aerial reach across the maritime boundary into Mexico have dimmed, given the nationalistic policies of President Andres Manuel Lopez Obrador, which has effectively shut down the awarding of new licenses for international operators.

Shell, for one, maintains it will proceed with an aggressive deepwater drilling campaign on blocks acquired during the previous administration. The company told Bloomberg it plans to drill eight wells, evenly split between 2020 and 2021, but will not initiate production under the current Lopez Obrador government.

A collection of stories from guest authors.