ExxonMobil VP for Africa, Asia Pacific Sees Future in Fossil Fuel Exploration
ExxonMobil’s Kerry Moreland, a geoscientist, managed breakthrough discoveries in the early stage of her 15-year career that have positioned the company for decades to come in South America. Now she is pursuing similar goals in Africa and Asia Pacific, as she explains in a moderated interview at this week’s IPTC in Kuala Lumpur.
Geoscientist Kerry Moreland was ExxonMobil’s exploration manager for the Guyana/Suriname Basin from 2014 to 2018, when the energy giant confirmed multiple discoveries, including the world-class Liza-1 find, where for decades drillers hit mostly dry holes.
After a stint as West Africa exploration manager and Africa geoscience manager for development and production, Moreland was promoted to her current position: vice president, Sub-Sahara Africa and Asia Pacific, exploration and new ventures, ExxonMobil Upstream Business Development Co.
Today, Moreland manages ExxonMobil’s oil and gas exploration acreage and evaluates new opportunities across the industry’s two most important frontier energy landscapes—Asia Pacific and Africa, which are destined to see the highest growth in energy demand by 2050 as well as present the greatest challenges for managing energy supply in a dual energy environment.
This week, Moreland discussed her company’s current successes and future vision in one of a series of IPTC Insights interviews conducted by a moderator with thought leaders at the International Petroleum Technology Conference (IPTC) in Kuala Lumpur. Here, JPT reports the highlights of Moreland’s interview.
IPTC: In January 2020, ExxonMobil increased its estimated recoverable resource base in Guyana to more than 8 billion oil equivalent barrels and announced its 18th discovery in September 2020 at the Redtail-1 well on the Stabroek Block. How did your teams in 2015–2018 lay the groundwork?
Moreland: I had the unique opportunity to be the exploration manager for the Guyana/Suriname basin at the time that ExxonMobil made our first discovery in 2015, and I saw it progress to first oil at the end of 2019.
I would say that from a professional standpoint, it doesn’t get better than this, being part of a team to use innovation and technology to make such a world-class discovery in a frontier area.
But let’s step back and talk first about the exploration history of the Guyana Basin. What many don’t appreciate is that 61 unsuccessful wells were drilled offshore in the basin prior to the Liza-1 discovery in 2015, and ExxonMobil drilled some of those.
Our commitment to this area dates back to 1938. Standard Oil actually conducted the early studies of the area in the late 1930s and early 1940s; that consisted of onshore seismic lines, geochemical surveys, and searching for possible onshore oil seeps to understand whether we had a working hydrocarbon system.
Now if you fast-forward a few decades, ExxonMobil continued our regional analysis in the 1990s and we really made a point to bring together a team with diverse skill sets and backgrounds and a unique understanding of the tectonic history and basin genetics of the area. In the end, this work demonstrated that the Guyana Basin should have world-class source rock potential and characteristics. This led to ExxonMobil’s entry into the Stabroek Block in 1999.
In 2015 we made our first discovery at Liza-1; we announced our 18th discovery for offshore Guyana in September 2020. Gross recoverable resources are approximately 9 billion oil equivalent barrels. Our exploration success rate has greatly exceeded the industry average for frontier and emerging plays. We achieved first production in less than 5 years after our first discovery, so that’s 4 years ahead of the industry average.
IPTC: You mention that since 2017, ExxonMobil was awarded 37 new exploration areas, totaling over 95 million acres. Can you add any detail in light of the announcement at year-end 2020 of a discovery in Suriname by ExxonMobil and its joint-venture partner, Petronas?
Moreland: This Suriname discovery … builds upon our exploration success in the same basin nearby in Guyana so we can now fully leverage our deep-water expertise across the basin.”
Editor’s Note: The US Geological Survey has ranked the Guyana-Suriname Basin as the second most prospective underexplored offshore oil basins in the world. Its geology is believed to be similar to that of the West African coast.)
Another area currently in my portfolio that we are really excited about is the Namib Basin in offshore Angola. In 2020 we announced that we increased our offshore exploration position by nearly 4.4 million gross acres across three deepwater blocks in southern Angola.
We’ve been in Angola for 28 years now and once again I think it is a great example of building upon a successful history of exploration and production in an area where we have a deep, well established relationship.
IPTC: Given the emphasis on a green-energy future, how important is upstream exploration for fossil fuels?
Moreland: It’s very important. The one thing that is a given in our business is depletion—the decline of existing oil and gas supply over time. If you couple [depletion] with growing energy demand [which will continue to have fossil fuels in the mix], substantial new investment in both oil and natural gas will be needed to replenish these sources.
Global population is expected to grow from 7.5 billion to over 9 billion by 2040 and global GDP [gross domestic product] is expected to nearly double in that time frame.
This growth, as we know, will be concentrated in developing economies. So as billions of people see their incomes rise, those incomes will be rising to middle class levels.
Asia Pacific, as I mentioned before, is right at the forefront of this dual energy challenge, and at the forefront of this population challenge; it alone is projected to have the largest growth in the middle class, nearly doubling between 2015 and 2030.
Then you look at Africa. There are 1 billion people in Africa and nearly 600 million are still without access to reliable energy. It is just clear to me that the resources we find now, and in the future, are a critical part of the energy mix that will fundamentally contribute to economic growth and advancement of living standards not only in Asia Pacific and Africa, but also across the globe.
IPTC: Yet the IEA and OPEC have warned that there is a danger now of underinvestment in fossil fuel exploration because government and company budgets are targeting renewables more decidedly.
Moreland: Exploration, we believe, remains a critical part of [what] I have just talked about. The IEA (International Energy Agency) indicates that it will take an estimated $12 trillion in new investment to meet demand [for fossil fuels]. But today we are in a competitive capital environment. According to Wood MacKenzie, just last year, IOCs [international oil companies) announced a $31-billion reduction in total capital spending, and ExxonMobil was part of that. We announced a CAPEX/OPEX reduction program in 2020.
Even with that though, ExxonMobil’s commitment to exploration remains. I think that is apparent from our recent drilling activity in Guyana and Suriname. We talked a lot about frontier areas today, but exploration is also happening in established areas, in and around existing facilities and projects that are up and running.
A prime example of this right in [Asia Pacific] is the ExxonMobil-operated PNG LNG project in Papua New Guinea. The project is expected to have at least a 30-year life and it will require additional natural gas resources to keep it full. We will have to explore for that additional gas.
There is also India, which is projected to become the world’s third-largest economy by 2025 and the most populous nation by 2040. The country’s reliance on imports is increasing, so ExxonMobil is currently evaluating India’s deepwater potential with ONGC [India’s government-owned E&P company] through a memorandum of understanding that helps support India’s growing gas demand. And while there has been some success in deepwater India, we also recognize that India’s offshore is vastly underexplored.
So, we start off with the questions: Why is this area underexplored? What have others not thought of? What could make this work? Can we build a team that is diverse enough to think about all of these “what ifs?”
Editor’s Note: India’s leading business news daily, The Economic Times, reported in January that ONGC asked ExxonMobil to become its joint-venture partner in exploring the Cauvery basin and Mumbai offshore.)
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