Exxon Mobil Corporation (NYSE:XOM) upstream business has received a major boost after its subsidiary ExxonMobil Exploration and Production Suriname inked a production sharing contract in the Guyana-Suriname Basin. The agreement with Staatsolie Maatschappij Suriname N.V is in partnership with Hess Corporation and Statoil ASA STO for Block 59.
Terms Of Agreement
Under the terms of the agreement, ExxonMobil, Hess and Statoil will each own 33.33% of the block. Exxon Mobil will also act as the operator of the block given that it is the world’s largest publicly traded oil company. The partnership is a result of Staatsolie ‘Open Door Policy Offshore Suriname’ program that ran from 15 September, 2015 to 7 September 2016.
The agreement between the companies is effective for thirty years divided into exploration, development and production period. The companies have already agreed on the minimum work to be done at the exploration stage. During the period, the consortium is to undertake geological research, seismic data collection and exploration drilling at the block.
All the partners in the consortium are to cater for costs in the exploration phases refundable after commercial discovery and production.
The Staatsolie Maatschappij partnership adds considerable acreage to ExxonMobil’s production portfolio in South America. The basin lies in water depths of between 2,000 meters and 3,600 meters spanning 2.8 million acres.
“We look forward to working with Staatsolie and our co-venturers to evaluate the potential of this new acreage. Adding this block enhances our leading global deep-water portfolio,” said Steve Greenlee Exon Mobil Exploration Company President.
The Guyana-Suriname Basin boasts of plentiful supply of oil and gas that Exxon Mobil through its subsidiary plans to take advantage off with the new partnership. The company plans to capitalize on the availability of cheap natural gas for the manufacture of chemicals for exports.
Exxon Mobile was up by 0.38% in Friday’s trading session to end the week at $81.28 a share. The stock has shed 0.3% in market value over the last three months. The overall industry is down by 2.7%.