According to sources familiar with the plans, The Wall Street Journal reported on Wednesday that ExxonMobil has ended a significant drilling operation offshore Brazil after failing to make a significant oil discovery there for years.
Exxon purchased deepwater acreage back in 2017, hoping to find oil in the prolific offshore basins where other majors and Brazilian state oil firm Petrobras have discovered enormous oil reserves. Exxon was the first oil and gas company to establish operations in Brazil in 1912 under the name Standard Oil Company of Brazil. However, according to the individuals consulted by the Journal, Exxon has abandoned its multi-year exploration effort.
Exxon completed two wells in the Opal and Tita zones in 2021. Exxon discovered oil and gas traces in the Tita block, according to ANP, the regulatory body for the Brazilian oil sector, Bnamericas reported in November 2021. In a 2018 tender, Exxon invested the equal of $560 million to acquire the majority of the block.
Over the past five years, Exxon and partners have invested $4 billion in tenders to acquire drilling rights in blocks near Brazil. However, the supermajor has yet to make that one significant find that would result in the approval of an oil project.
The drilling setback is unusual for Exxon, which in late 2019 helped Guyana become the newest oil-producing and oil-exporting country after striking so much oil off its coast, which neighbors Brazil to the north. Exxon continues to explore the Brazilian offshore waters despite the end of the drilling operation there.
Exxon spokeswoman Michelle Gray told the Journal, “We continue to work with our co-venturers to evaluate the data obtained from the extensive drilling program to assess the potential for future exploration operations in those blocks.
Exxon announced in December that by 2027, more than 70% of capital investments would be used for strategic projects in the Permian Basin in the United States, Guyana, Brazil, and LNG projects around the globe.
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