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Project excellence Guyana discovery Knowledge business
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Bass Strait Fuel standards Baytown update
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Project execution excellence
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Photo by Robert Seale
Upfront
In May of this year, an ExxonMobil team of explorers and drillers successfully brought in the Liza 1 well 120 miles off the coast of the South American nation of Guyana. Liza is a true frontier wildcat well – a significant discovery, and the first drilled on a block spanning 6.6 million acres. The story of how technology, talent and experience brought about a great outcome begins on page 15. Continuing this issue’s focus on the challenges of exploration, on page 9 is an in-depth interview with Steve Greenlee, president of ExxonMobil Exploration Company. Greenlee discusses, among other topics, the company’s integrated approach to adding high-quality
standard. The new rules could create significant problems, and a story on page 13 provides details. A profile of the work special- ized ExxonMobil procurement, real estate, information technol- ogy and other teams conduct to support our operations in remote areas starts on page 21. Plus, Delivering information (page 25), Bass Strait update (page 29) and Mobil 1 in Singapore (page 34). We hope you enjoy this issue of The Lamp .
resources, and howwe derive maximum value from them. Beginning on page 5, our cover story features an interview with Jim Flood and John Plugge, vice presidents with ExxonMobil
Rex W. Tillerson Chairman and CEO Mark W. Albers Senior Vice President Michael J. Dolan Senior Vice President Andrew P. Swiger Senior Vice President Jack P. Williams Senior Vice President Darren W. Woods Senior Vice President Kenneth P. Cohen Vice President-Public and Government Affairs Jeffrey J. Woodbury Vice President-Investor Relations and Secretary Bob Davis Editor Pat Gabriel GCGMarketing Art Director Len Shelton Photography Coordinator Cynthia Solomon Production and Distribution Coordinator
Development Company. In the article, they describe how ExxonMobil safely and
consistently completes complex oil and gas projects faster and at a lower cost than its competitors. Most drivers know that the gasoline and diesel fuel that we put in our vehicles contains ethanol. But what many don’t know is that the Environmental Protection Agency has raised the ethanol portion of motor fuel above the current 10 percent
Bob Davis Editor
Please address all Lamp correspondence, including requests to reproduce any portion of the magazine, to the editor at Exxon Mobil Corporation, 5959 Las Colinas Blvd., Irving, TX 75039-2298.
In this issue
3 Just the right time Reforms would help the chemical industry 5 A reputation for excellence Leading the industry in project execution 9 A great time for exploration Meet Steve Greenlee, president of ExxonMobil Exploration Company
13 Repeal the biofuel mandate More rules will make a difficult situation worse 15 Technology and vision Amajor discovery offshore Guyana 21 Frontier support for business success Providing safe, secure operations around the world
25 Knowledge is their business Information when and where it’s needed 29 Bass Strait at 50 Australian venture marks a milestone 33 Panorama Business highlights from around the world
Digital issue now available A digital issue of The Lamp is now available online. Please visit exxonmobil.com/digitallamp to have a look.
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Bipartisan efforts at just the right time By Rex W. Tillerson Chairman and CEO of Exxon Mobil Corporation
have announced approximately $150 billion in investments. The chemical industry is build- ing new plants – and retrofit- ting others to leverage U.S. natural gas. The data on nominal construction spending shows construction spending by the chemical industry increased near- ly 140 percent from June 2014 to June 2015, with the growth rate exceeding 150 percent in the first half of this year alone. Investments and jobs If all of the industry’s invest- ments move forward, they will create nearly $300 billion in new economic output and lead to more than 400,000 new jobs. The investments would also lead to $21 billion in permanent
new federal, state and local tax revenues by 2023. But the future successes of the shale revolution and America’s manufacturing renaissance are not forgone conclusions. We need policies equal to this historic opportunity. The good news is that the chemical sector may be getting some timely assistance from a rare instance of Washington bipartisanship. Democrats and Republicans in Congress have come together in an effort to modernize the Toxic Substances Controls Act (TSCA), the outdated regulations affecting the chemical industry. The proposed reforms will help bring 1970s legislation into the 21st century.
It’s taken years of bipartisan work and negotiation, but these changes are just the comprehen- sive overhaul we need. Just as important, these bipar- tisan efforts appear to have an excellent chance of succeeding. The reform is drawing impressive support from the industry, building trade unions and organizations including the Environmental Defense Fund, National Wildlife Federation, March of Dimes and U.S. Humane Society. Modernization By modernizing the regulations governing the chemical industry, we can strengthen and clarify the role of government in overseeing and protecting public health. The proposed reforms would provide
Evidence continues to show that the U.S. economy is struggling. And economists from across the ideological spectrum have rightly observed that by historic stan- dards, this is one of the weakest U.S. recoveries on record. But even in the midst of anemic growth and falling labor- force participation rates, one sec- tor continues to power forward: America’s chemical industry. The reason for the resurgence is well known: Vast new supplies of natural gas flowing from U.S. shale deposits have given Ameri- can chemical manufacturers a global advantage. The response from the indus- try is a flurry of activity that could reap benefits for decades to come. Chemical manufacturers
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a better system for the Environ- mental Protection Agency to evaluate risks of both new and existing chemicals using the best available science. This will give the public confidence in the safety of the chemical products used every day. Regulatory modernization will also help strengthen and sustain America’s role as a leading inno- vator for chemical products – an area that drives 25 percent of the U.S. economy. To borrow a phrase from Daniel Yergin, plastics and chemical products are “the bricks and mortar of contemporary civilization.” They are found in 96 percent of manufactured goods – from lifesaving medical devices and personal technologies, to
food packaging and storage, to building materials. Chemicals are vital to making the world safer and healthier. They are also critical to using energy more efficiently, as well as helping us minimize man- kind’s impact on the environment. But over the decades, the regulatory landscape for the U.S. chemical sector has been mired in complexity and uncertainties because of anachronistic Wash- ington rules. Broken system The TSCA has made it difficult to greenlight innovations or effec- tively calculate the costs of various policy options. Because the federal legislation is so out of date, this system is not working. In the face of this dysfunction and ambiguity
in Washington, a patchwork of state and local laws now exists – further complicating interstate commerce and the industry’s investment decisions. Thanks to the efforts of leaders from both parties inWashington, we can look forward to clearing away that clutter and enacting reforms that bring clarity, certainty and consistency to America’s dy- namic and vital chemical industry. With these reforms, parents in ev- ery state can be confident that their children are adequately protected from any risks, while manufacturers fromNew Jersey to California will have the regulatory certainty they need to continue to innovate and create jobs. TSCA modernization passed the House this summer with over-
whelming bipartisan support. And in the Senate, a coalition of both Democrats and Republicans are pushing similar legislation across the finish line in the hopes of sending a final bill to the presi- dent’s desk. Those in Congress who are working together to modern- ize TSCA regulations deserve credit. They are acting in the best interests of our economy and our environment. They are also setting an example for modern Wash- ington – building bridges across parties to act with wisdom and common sense. It is a moment for which we can all give thanks – and which should guide the efforts of our elected leaders and policymakers in the future.
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A reputation for
excellence John Plugge, vice president of project management and execution; and Jim Flood, vice president of arctic and eastern Canada, discuss how ExxonMobil Development Company leads the industry in project execution.
ExxonMobil has become recognized for completing oil and gas development projects faster and at a lower cost than its competition. Why is that? Plugge: The underlying reason dates back to Exxon’s decision before the merger with Mobil to establish one upstream company that was all about project man- agement. That move reflected the corporation’s anticipation of significant growth in the number and size of development projects around the world, including many in higher-cost environ- ments. Rather than the traditional model of carrying out develop- ment through affiliates, Exxon foresaw the efficiencies of having one organization consistently and flexibly deploying its expertise wherever needed. How has the company ad- vanced its reputation for proj- ect execution since the merger? Plugge: First, ExxonMobil Devel- opment Company (EMDC) has had the benefit of working with the industry’s largest and most diverse portfolio of projects. Our portfolio contains more than 120 projects to develop 24 billion
oil-equivalent barrels represent- ing conventional and uncon- ventional oil and gas, heavy oil, and liquefied natural gas (LNG) around the globe. This diversity has allowed us to be selective in pursuing the right projects at the right time. In addition, we have developed a structured project management system that has enabled not only performance consistency but a means for continuous improvement. Most importantly, in completing more than 100 projects over the past 15 years, we have developed a highly experienced workforce with a depth of technical and management expertise that is unmatched by our competitors. Flood: Let me add that our project management structure focuses accountability for project execution at a regional level with the backing of one global organi- zation that provides the people, processes and tools for those projects. Our global organization “sees the world,” so to speak, and within 24 hours we can apply lessons learned from one region to another when issues occur, regardless of whether they’re positive or negative. We have the ability to fly in project
experts to provide solutions to any issues. We know of no other international oil company with that capability.
What factors must you consider in early project planning?
Plugge: Among the more critical steps is selecting a leadership team that understands the tech- nical side of the work and has the right management skills. This decision evolves out of a process by which we decide if a project will be routine, meaning that it is something we have done before, or nonroutine. Nonroutine projects tend to be bigger, more complex and require many years to complete. By distinguishing routine versus nonroutine early on, we can select the leaders and teams best suited for the project. Flood: Based on EMDC’s 15-plus years of proven, demonstrated project experience, we under- stand that it’s critical to lock down the development concept as soon as possible. The key then is to manage each of the critical transi- tions, from front-end engineering to detailed design to the begin- ning of the construction phase so that we can resolve all major
Story by Mike Long
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ExxonMobil’s Jim Flood (left) and John Plugge.
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Execution excellence allowed ExxonMobil to start up the Papua New Guinea liquefied natural gas project ahead of schedule in 2014.
Photo by Richard Dellman
How does ExxonMobil’s project execution benefit from new technology?
project issues before moving from one phase to the next. We have seen major projects in the industry get derailed due to a constant re- cycling of poor decisions, resulting in the delay of critical engineering deliverables. This can have a sig- nificant negative impact, including driving up costs and delaying proj- ect completion. We must eliminate uncertainty as early as possible to ensure that you enhance project predictability for both cost and schedule performance.
again for engineering, procuring equipment, fabricating facilities, hooking up modules, building ship hulls, performing pre- commissioning and other work. In particular, their learning curve has grown tremendously, espe- cially with their participation in our design-one, build-multiple approach. This has helped us increase overall project predict- ability, lower costs and achieve faster project completion.
of a floating production, storage and offloading vessel and a tension-leg drilling platform in an industry-record 34 months. We then adopted the design- one, build-multiple concept when we essentially replicated Kizomba A for Kizomba B and delivered the same scope of work in an industry-record 31 months. We have since used the approach many times, including at Sakhalin-1 in Russia and both the initial and expansion heavy- oil projects at Kearl in western Canada, as well as at our joint venture in Qatar with RasGas and Qatargas to build multiple LNG trains. We also plan to use it with the future SAGD oil sands project in western Canada and the potential Liza deepwater development in Guyana.
Plugge: New technology, which mainly comes from ExxonMobil Upstream Research, improves project economics and is critically important amid today’s lower oil and gas prices. A good example is in Canada, where we could use solvent-assisted steam to produce more bitumen from our Aspen development. This new technology, along with other capital-efficiency initiatives, has significantly reduced costs. What other competitive advantages does ExxonMobil have in project execution?
When did ExxonMobil have its first big success with the design-one, build-multiple approach?
How else do you achieve better predictability?
Plugge: It’s critical that we select contractors with the core competency for the work we want done. EMDC has built a global network of contractors to whom we return time and time
Flood: It started with the Kizomba A and B deepwater developments in Angola. We completed Kizomba A in 2004, including installation and startup
Flood: First is our disciplined ExxonMobil Capital Project Sys-
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Structured project management provides efficiencies at Sakhalin-1 in Russia and other major projects worldwide.
A design-one, build-multiple approach cut costs and stream- lined schedules at the Kizomba developments offshore Angola.
Photo by Robert Seale
tems (EMCAPS), that standardize our processes across all projects. Second is our structured gate process to assure that we finish work before moving onto the next phase. This approach also allows us to confirm that project risks are properly addressed and to test the economics to assure the project is well founded and meets our stakeholders’ require- ments for implementation. In addition, EMCAPS is our execu- tion framework for managing the corporation’s Operations Integrity Management System, through which we not only de- sign and construct facilities with safe execution in mind but focus on their ongoing integrity and safe operation for the long term. A third advantage is the inte- grated approach we take across all of our upstream companies.
Whether it’s Exploration, Produc- tion, or Gas and Power Marketing, we act as an integrated upstream company and work to meet the general interest of the corpora- tion. A great example is howwe integrate production personnel into the project team before front- end engineering to provide an op- erational perspective all the way through the commissioning and startup phase. This one-team ap- proach is more efficient and timely compared to industry norms, and is being extended to the concept execution phase as part of our upstream synergies effort. Please comment on how project execution excellence supports improved safety.
improvement since the estab- lishment of EMDC. But people are still getting hurt. We know we need to continue to drive the value of caring about the safety of each and every person at our work sites so that we can achieve our objective of “Nobody Gets Hurt.” A great example of our safety progress is Sakhalin-1 in Russia. When we started almost 15 years ago, we didn’t know a lot about the safety culture in Russia. With continuous projects over this time and the application of our safety values and principles, we have seen Sakhalin become one of the corporation’s safest places to work. The Exxon Neftegas Limited project and ExxonMobil Drilling teams have won a com- bined 13 ExxonMobil Develop- ment Company President’s
Safety Awards since the awards started in 2007.
Plugge: Our safety success also comes down to the strong relationships we have established
with our contractors, which have never been better. We
have excellent alignment about safety and what it means for the business. Our practice of having ExxonMobil teams work alongside contractor teams in the contrac- tors’ fabrication yards and design shops has helped us achieve a leading safety performance.
Flood: Safety has been a relent- less journey, with consistent
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Steve Greenlee, president of ExxonMobil Exploration Company.
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A great time to be in exploration The Lamp profiles Steve Greenlee, ExxonMobil Exploration Company president, and how the corporation is competing for the world’s best oil and gas opportunities.
When did you first develop an interest in geoscience? Actually, my passion was to be- come an oceanographer. My dad, a dentist, loved getting outdoors for fishing, surfing and skiing, so we spent a lot of time on the Jersey Shore. Early on, I enjoyed reading books on just about anything that had to do with the ocean, and if you had asked me a question about coral reefs or ocean currents, I probably could have talked for hours. In planning for college, I discovered the best way to follow my passion was through geology. After obtaining a bachelor’s degree in geology from Duke University, I pursued a master’s in oceanography at the University of Rhode Island. What led you to ExxonMobil? I was writing my master’s thesis on the science of seismic stratigraphy. The details of that science were invented at Exxon Production Research (EPR) under the leadership of a fascinating
geologist named Peter Vail. I met him at a conference on sea-level changes and got to see his North Sea research. I subsequently de- cided Exxon was the place for me. I started at EPR in Houston in 1981, planning to eventually return to graduate school for a Ph.D. and work in academia. But we were conducting seismic stratigraphy workshops all over the world and developing lots of new concepts. It was so much fun that I couldn’t believe I was getting paid to do it. I remained at EPR for 12 years. What assignments followed? My first full-time move out of research was a dramatic one. In 1993, the new Exxon Ven- tures (CIS) Inc. assigned me as a supervisor in western Siberia. I next worked in Kazakhstan before moving to New Orleans as a manager for Exxon’s Gulf of Mexico production unit. After the merger with Mobil, assignments followed in Brazil, Saudi Arabia,
Texas and Asia-Pacific before I returned to research as presi- dent of ExxonMobil Upstream Research in Houston. In 2010, I became president of ExxonMobil Exploration Company. How would you summarize Exploration’s function? Our job is to discover new sources of oil and gas that are better than what is already in ExxonMobil’s industry-leading resource base, now estimated at 92 billion oil-equivalent barrels. By better, I mean they have the potential to generate a higher economic return over the life of the resource for all stakeholders. We’re not just in the business of replacing what has been pro- duced. We are after high-value opportunities. How well is ExxonMobil positioned to carry this out? We are better positioned than ever to identify and pursue the greatest-value opportunities. This
is partly due to how the com- pany’s resource-acquisition effort is structured today. Exploration is focused primarily on discovering new fields rather than its tradi- tional responsibility for adding all resources to the corporation’s portfolio. ExxonMobil Upstream Ventures focuses on securing in- terests in discovered but undevel- oped oil and gas resources. The corporation’s XTO Energy affiliate specializes in North American unconventional resources mainly in shale plays. How does this provide benefit? From a corporate standpoint, it benefits us by allowing each busi- ness line to focus on a specialized area or role. Our competitors might be good explorers, or good at negotiating acquisitions, or experts in unconventional plays. But we can pursue all three at the same time. With our three organizations working together while focused on our individual specialized roles, we are in a
Story by Mike Long Photography by Robert Seale
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Where has the corporation had success with a full life cycle model? A recent example is the Papua NewGuinea (PNG) liquefied natu- ral gas (LNG) project that started up in 2014. It has the potential to produce some 9 trillion cubic feet of natural gas for export to Asian markets as LNG for decades to come. ExxonMobil brought all of its upstream strengths to bear in an extremely challenging environ- ment with minimal pre-existing infrastructure. But we have put in place the ingredients needed for a successful long-term project and a strong relationship with the gov- ernment and the people of PNG. Best yet, we are still exploring for new resource opportunities. Of course, we have estab- lished long-term relationships all over the world.
stronger position to look for the most attractive opportunities. Exploration is not a stand- alone business line. We don’t drill a discovery and then sell it to someone else to develop and produce. We can apply the full breadth of ExxonMobil’s indus- try-leading upstream organiza- tion from exploration and devel- opment through production and gas marketing, all supported by a research company that provides the latest technology. Plus we have world-class downstream and chemical businesses. This allows us to generate maximum value through the full life cycle of an energy development. This is ExxonMobil’s prime differen- tiator, and it is a strength that is particularly attractive to host governments.
In July, we announced a significant oil discovery on a 6.6 million-acre block – about 10,000 square miles – offshore Guyana in South America (see story, page 15). We’re optimistic about establishing a long-term presence in Guyana to help the nation build the infrastructure to support development of its oil and gas resources. Switching topics a bit, how does Exploration develop its geoscience talent? We focus on having employees experience the full breadth of pe- troleum geoscience, from the ini- tial exploration concept all the way through the last barrel produced. The best geologist is the one who has worked in teams with the engineers, commercial people, gas marketers and others to learn
ExxonMobil Exploration by the numbers Employs about 1,000, including 650 geoscientists. Explores in more than 30 countries. Explores on 116 million acres. Our exploration drilling program added 2.7 billion oil-equivalent barrels in 2014, with additions from multiple resource types around the world. Additions from exploration drilling averaged approximately 2 billion oil-equivalent barrels per year over the last decade.
A major ExxonMobil strength is generating maximum value through the full life cycle of a development.
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From left: ExxonMobil Exploration Company’s Kim Begay-Jackson, Steve Greenlee, Norm Allegar and Paul Lee discuss the results of a 2015 seismic program conducted at the Sakhalin-1 project.
How is ExxonMobil’s technology leadership
how to develop a superior project. Those who become technical and business leaders within the corporation will have a complete understanding of what is required to create the most value for shareholders. These opportunities are not necessarily available within many other companies. How are lower crude oil and natural gas prices affecting exploration? Some might think we would be significantly pulling back, as many in the industry have. While our capital expenditures are down from last year, we are well posi-
tioned to continue competing for the most attractive opportuni- ties. We are organically growing exploration in new areas, and searching for more opportunities in established areas. Further, we are seeing a lot more exploration prospects coming on the market. Some of these involve situations where fi- nancially constrained companies are offering attractive deals in which we can acquire an interest and help them explore their qual- ity properties. This is particu- larly true in the international and deepwater sectors.
paving the way for exploration, development and production in ultradeep water. While some of our competi- tors, for instance, are focusing exclusively on U.S. shale plays, our exploration opportunities span the globe, and we continue to progress into increasingly challenging areas as our technol- ogy advances. Without a doubt, it’s a great time to be in exploration.
keeping it more competitive? We have capabilities to see things others can’t. For example, our new full wavefield inversion tech- nology allows us to model subsur- face geology in much more detail than the industry could achieve before. And this is just one of a number of seismic-imaging tech- nologies made possible by our industry-leading use of super-fast, high-performance computing. ExxonMobil’s technology ad- vantage also spans the upstream to include drilling, engineer- ing and facilities design – all
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Repeal the U.S. biofuels mandate ExxonMobil supports environmental protection and policies based on sound science. But rules requiring ever-higher biofuel blends will only make a difficult situation worse.
Elisabeth Vrahopoulou, ExxonMobil senior fuels advisor.
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Story by Thomas L. Torget Photo by Janice Rubin
ExxonMobil clean fuels research Our Corporate Strategic Research laboratory and ExxonMobil Research and Engineering Company conduct an array of programs designed to study future transportation fuels and engines. Biofuels research includes collaborating with Iowa State University on using heat to convert biomass into intermediates, which can then be upgraded into fuel, and research involving advanced biofuels from algae. Other important programs include the study of advanced technologies for increasing fuel economy by separating fuel into high- and low-octane streams, which the engine can use to optimize fuel economy during driving.
ever, that’s not true for higher- percentage blends. Ethanol is corrosive and attracts water. Testing such as that conducted by the Coordinated Research Council has shown that dam- age to engine seals, hoses, fuel systems and exhaust systems can occur when ethanol content in fuel rises above 10 percent. This applies to cars, trucks, motorcycles, boat engines, lawn mowers, snowmobiles and other gasoline-fueled engines. “The majority of vehicles on the road today are designed and warranted for fuels up to E10,” says Elisabeth Vrahopoulou, se- nior fuels advisor for ExxonMobil Refining and Supply Company. “It is estimated that less than 15 percent of the cars and light- duty trucks are designed and warranted for blends containing more than 10 percent ethanol. In fact, auto manufacturers have unanimously advised consum- ers not to use higher ethanol blends like E15 in vehicles unless the owner’s manual specifies such fuels. The use of fuels with higher than 10 percent ethanol can void vehicle warranties.” Over the years, some manu- facturers have offered “flex fuel vehicles” (FFVs) that can safely use higher ethanol blends, including E85, which contains as much as 83 percent ethanol. But ethanol has lower energy density than gasoline and yields fewer miles per gallon. The market avail- ability of E85 is limited because any retailer offering it must install expensive storage and handling
For nearly 10 years, the U.S. En- vironmental Protection Agency (EPA) has required refiners to blend biofuels into gasoline and diesel sold in the U.S. The EPA recently finalized rules that effectively raise the ethanol portion of gasoline above the current 10 percent level. Such rules will likely create serious problems for motorists, fuel retailers and refiners, with no benefits for the environment. The EPA’s biofuels regula- tions are part of a renewable fuel standard (RFS) first legislated by Congress in 2005 and amended in 2007. The RFS was primar- ily intended to improve energy security based on two key as- sumptions: that annual U.S. fuel consumption would continue ris- ing indefinitely and that domestic oil supplies would be insufficient to meet that rising demand. Both assumptions are false. Gasoline demand actually de- creased since lawmakers enacted the legislation, driven by the 2007 recession and reduced consump- tion brought about by the replacement of older, less fuel- efficient vehicles with newer ones. In addition, domestic oil and gas production is up dramatically due to technological advances. The United States is now the world’s leading energy producer. E10 blend Nearly all gasoline sold today in this country contains up to 10 percent corn-based ethanol. This blend, known as E10, is not harmful to vehicle engines. How-
systems to keep E85 separate from other fuels. According to the PetroleumMarketers Association of America, “… FFV owners are choosing to fill up with gasoline due to its 27 percent higher energy content and superior fuel economy. Given the slimmargins on retail fuel sales, retailers are forced to convert slow-moving E85 tanks back to gasoline in order to increase volume and maintain profitability. Consumer choice is the real reason E85 pumps are on the decline.” Flawed policy Given the trend of decreasing domestic gasoline demand, it follows that U.S. refiners won’t need more ethanol in the future to produce E10 fuels. Neverthe- less, the EPA requires refiners to increase the amounts of ethanol they blend into their motor fuels each year. This not only increases the percentage of ethanol in mo- tor fuel, but it ultimately exceeds the operational design standards of most automobiles. While the EPA’s biofuels man-
date for 2015 is about 17 billion gallons, that number more than doubles to 36 billion gallons by 2022. Non-food-based biofuels that could be used in place of higher ethanol blends – which the RFS envisioned – are available commercially, but in very limited quantities due to significant tech- nological and economic hurdles. In short, the RFS requires fuels that are incompatible with today’s manufacturing technolo- gies and vehicle fleet. “The RFS should be scrapped, or at the very least reformed,” says Ken Cohen, Exxon Mobil Corporation Public and Gov- ernment Affairs vice president. “The EPA should limit its ethanol mandates to no more than 9.7 percent of total U.S. gasoline de- mand. That would ensure that the gasoline sold at service stations across America does not pose any threat to the tens of millions of automobile engines not war- ranted by car manufacturers to handle gasoline with more than 10 percent ethanol.”
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A testament to technology and vision Company completes successful Liza 1 well offshore Guyana.
Jeff Simons heads the company’s venture office in Georgetown, Guyana.
The data from the well logs looked promising, and a re-
of the Liza 1 well since crews started drilling in March. “A small team worked more than a year designing and executing a plan that had now brought us to the brink of what could be a major discovery,” says Moreland, who began her career with the company in 2005 after graduating from the University of Oklahoma with a master’s degree in geophysics. “The sus- pense and excitement continued
to grow by the hour as the drill bit approached the top of the pre- dicted reservoir section.” While the team in Houston prepared to analyze the real-time results soon to come, Moreland boarded a flight to Guyana early the morning of Monday, May 4, to be at the well site the moment the first results came in. “When I finally arrived in Georgetown, the drillers had just entered the reservoir section some
strained optimism began to build among small groups of specialists at the company’s north Houston campus, at its Georgetown ven- ture office, and aboard the drill- ship Deepwater Champion 120 miles off the coast of the South American nation of Guyana. Kerry Moreland and a team of other ExxonMobil geoscientists had been tracking the progress
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Story by Bob Davis
LIZA 1
Georgetown
South America
Guyana
Photo by Robert Seale
Champion , Moreland and the wellsite geologists had the benefit of something else that supported the significance of the find: the drill cuttings from the reservoir itself. “We analyzed the rock frag- ments in a small lab on board the ship, both for rock type and for what we call ‘shows,’” Moreland says. “That analysis, along with the well logs acquired while drilling, suggested the potential for a sig- nificant volume of high-quality oil.”
11,000 feet beneath the seabed,” Moreland says. “I was too excited to sleep, even for a few hours, and was at our helicopter base at dawn. By 9 a.m., I was aboard the ship.” By this time the Exploration and Drilling teams in Houston, as well as those on the third floor of the small Guyana venture office, felt they could be witnessing some- thing big, as the well logs showed the intermittent presence of hydrocarbons within the target.
“We didn’t know at that point what we had, since we were drill- ing in and out of several sands,” says Jeff Simons, country man- ager, who transferred to Guyana in late 2014 from an assignment in Europe. “Drilling continued through the night, and on the morning of May 6, it became clear we’d found a column of hy- drocarbons extending more than 295 feet. That’s big, really big.” On board the Deepwater
The Liza 1 discovery well is 120 miles offshore Guyana in 5,700 feet of water.
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Photo Getty Images Inc.
Population: 800,000, concentrated along the country’s coast. Government: Multiparty democratic republic. Area: 83,000 square miles, about the size of Idaho. Economy: Agriculture, timber, fishing and mining. Languages: English (official), Creole, Hindi, Urdu, Chinese, Amerindian dialects. Guyana at a glance
Climate: Tropical, with an average temperature of 81.5 degrees Fahrenheit Flora: Approximately 80 percent of Guyana is tropical rainforest, much of it untouched. Biodiversity: The country has 225 species of mammals, more than 300 species of reptiles and amphibians, 815 (and counting) species of birds, and more than 6,500 types of plants.
Photo Getty Images Inc.
A longshot The odds were against it. The Stabroek block that ExxonMobil acquired rights to explore from the Republic of Guyana is 6.6 mil- lion acres. Water depth at the site exceeds a mile. There had never been a well drilled anywhere on the block. The 22 wells drilled by other companies since the 1970s on the coastal shelf outside the southern boundaries of the block had all proved noncommercial.
“Geologically, the well was quite risky,” Moreland says, “with a low probability that it would turn out to be successful. It was a true frontier wildcat well.” But she goes on to explain that the location of the Liza 1 well held particular interest for the explorers, since initial seismic data and geologic analysis of the region “suggested the presence of sediment fairways transporting sandstone reservoirs into the ba-
sin. In addition, oil and gas shows in previously drilled wells closer to the coast indicated a working hydrocarbon system potentially extending farther offshore into the Liza area.” Next steps While ExxonMobil techni- cal experts in the Exploration, Development and Upstream Research companies continue to analyze the well data and plan for
potential future appraisal drilling, the largest 3-D seismic survey in the company’s history is now underway on the Stabroek block. Two seismic vessels are acquir- ing data over approximately 6,500 square miles, an area comparable to the land mass of the Hawaiian Islands. The program includes two support ships that make sure that there’s no interference from other vessels in the area, as well as two supply boats making regular trips
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Above: Kaieteur Falls in Guyana’s interior rainforest is among the highest and most powerful waterfalls in the world. Above left: There are more than 800 species of birds in the country, including macaws and other parrots. Left: Located at the mouth of Guyana’s Demerara River, this old red and white striped lighthouse guided many ships into Port Georgetown. Far left: City Hall, with its Disney- like spires, houses the offices of Georgetown’s mayor and city council.
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The Liza1 team Kerry Moreland, Guyana basin project manager.
fromGeorgetown and Trinidad to bring food, equipment and sup- plies to crews. With support from the Guyanese government, company teams mobilized this seismic program in about six weeks after the discovery, an extraordinary achievement. The Deepwater Champion finished drilling and moved off location June 20, and by mid-July all permits were in place and the seismic vessels began acquiring data. In Georgetown, the capital of Guyana, there’s excitement and anticipation for what the discovery could ultimately mean for the country’s future. Guy- ana’s Minister for Governance and Spokesman for Natural Resources Raphael Trotman says that he and the other leaders of
Scott Dyksterhuis, lead Liza geoscientist. Randy Perkey, lead block geoscientist. Lisa Roehl, project manager during Liza’s drilling. Brooke Harris, commercial advisor. Linda Price, regional geoscientist. Liza1overview Discovery is in a challenging frontier, unproven basin. Stabroek block is 6.6 million acres. Water depth at the Liza 1 well is 5,719 feet. Total well depth is 17,825 feet. Reservoir found in sandstone is from the Upper Cretaceous period (~70 million years old).
Scott Dyksterhuis (left), Kerry Moreland and Randy Perkey recap the drilling of the Liza 1 discovery well.
his nation view Liza as more than simply a discovery of oil. “For many generations, we have always believed in the po- tential for the discovery of oil off our shores, and in our sovereign right to produce that oil,” he says. “By the same token, the Liza discovery has coincided with the election of a new government in Guyana and the upcoming 50- year anniversary of our country’s independence. So we are viewing this in more than simply econom- ic terms: it has imbued a sense of responsibility, and a new spirit of hope and pride in our nation.” Trotman goes on to say that
Guyana Minister for Governance and Spokesman for Natural Resources Raphael Trotman says the Liza 1 discovery has brought a new spirit of hope and pride to his country.
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Photo by Robert Seale
if development were to occur, he views the relationship with ExxonMobil as similar to the forging of a long-term partner- ship. “ExxonMobil for us is more than just a company; it’s more like a trusted partner who is add- ing value to our association … a partner with whom we can share our vision.” Office evolution Jeff Simons remembers when the company started gearing up in earnest a few years ago for its commitment to drill the Liza 1 well. “The first team on the ground set up desks and phones in a
suite that Queen Elizabeth had once used during her visit to the country in 1994,” Simons recalls. “Their equipment was basically a copy machine and a computer connection to Houston. Soon after I arrived, staffing grew to four employees, and we set up a transition office in a small space in an apartment building outside of town.” By November 2014, with the start of Liza drilling drawing near, the core team and several addi- tional employees moved to larger quarters on New Market Street in the center of the city, close to various government offices and
a new hotel. More specialists in drilling; geology; computer and telecommunications support; safety, health and environment; procurement; public and govern- ment affairs and other functions have since joined the staff, which now numbers about 20 employ- ees and contractors. “But even as the office has grown, we operate as a close- knit team, where everyone looks out for each other and helps get things done,” Simons says. Technology and talent Steve Greenlee, president of ExxonMobil Exploration Com-
pany, believes the success of the Liza 1 well is a fine example of ExxonMobil technology, experi- ence and talent at work. “We applied advanced seismic imaging and analysis; our global experience; and an integrated, well-planned approach by talent- ed teams in Guyana and Houston to successfully overcome the un- certainties of a truly frontier well that will add valuable resources to ExxonMobil’s portfolio and create great value for the nation of Guyana,” he says.
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Frontier support key to business success
Global Services Company provides safe, secure offices and operations worldwide.
Jeff Marsh and Kellie Canaday are among hundreds of ExxonMobil specialists provid- ing procurement, real estate and facilities, information technology and other essential services to remote company operations.
Story by Tracy Torma
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When ExxonMobil announced a significant oil discovery offshore Guyana this year, behind the scenes of the successful explora- tion effort was a team of real estate, information technology and procurement experts. From setting up office space, to securing equipment and con- tracts for operations, to building residential housing for expatriate employees in remote locales, ExxonMobil Global Services Company (GSC) provides critical support to exploration, develop- ment and production activities in frontier locations worldwide. “We help the business focus on its core job of finding and produc- ing oil,” says Peter Sturla, Global Real Estate and Facilities (GREF) Angola project manager. “Above all, we want employees to be safe. As such, we strive to provide them with secure and comfort- able office and living quarters so that they can concentrate on the jobs at hand.” Sturla is currently overseeing construction of a new 60-unit housing complex in Angola for expatriates supporting the com- pany’s upstream operations. In the past five years, he has helped build offices in Dubai and housing in Saudi Arabia and Egypt. A team effort Three key GSC organizations help get operations up and running, and provide safe offices and housing for employees when ExxonMobil enters a frontier
location. GREF leases or builds and manages office space and housing facilities for expatriates. ExxonMobil Information Technol- ogy (EMIT) professionals provide computing, network and telecom- munications capabilities, and Global Procurement secures the goods and services to run the op- erations – everything from drilling equipment to pens and pencils. Often, new exploration and production areas are in remote locations in underdeveloped countries. Office space may be limited or unavailable. Telecom- munications links are nonexis- tent. Even roads and airports needed to get essential supplies into these areas can be limited. “For our permanent facilities compound to support LNG op- erations in Papua New Guinea, the company started by putting in roads to get to our site, build- ing power generation and water treatment plants and installing telecommunications,” says Scott Clare, manager of Asia-Pacific real estate and projects for GREF. Now that LNG production has begun, GREF has also completed construction of a state-of-the-art facility to support ExxonMobil’s workforce. The ExxonMobil Haus in Papua New Guinea (PNG) now accommodates more than 300 employees and features many of the same amenities as the new Houston campus, including ad- justable workstations in an open, collaborative environment outfit-
ted with high-definition wireless projectors, 55-inch light-emitting diode displays and ClickShare presentation technology. The 72-acre site includes a recreation center for employees. “We accomplished this in a country that has few examples of this type of advanced construction and with a workforce made up mostly of local workers,” says Dave Baker, senior project manager. First on the ground The GSC team’s involvement starts at the beginning of a project. “We’re integrated with the business to understand its long-term strategy and to deliver solutions to get operations up and running,” Clare says. Today, ExxonMobil has 18 ven- ture offices throughout the world. The company often establishes new offices in frontier locations in a hotel, as it did in Guyana (see story, page 15). “As ExxonMobil enters a new country and works with the government to set up production- sharing agreements, the advance team needs support and equip- ment from the very first day,” says Jeff Marsh, who oversees pro- curement for drilling and explora- tion projects around the world. GREF, EMIT and Procurement work together to set up offices, communications networks and living arrangements for person- nel. They also work closely with ExxonMobil Security and Medicine and Occupational Health to
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This 60-unit housing complex in Luanda, Angola, is nearing completion and consolidates three previous locations into one.
ensure that working and living arrangements are safe. “Proximity to our office and a local airport is critical in selecting a housing location,” Sturla says. “In developed locales, we look for housing that’s already built. Here in Angola, we’re consolidating current housing into a new com- pound of three-bedroom houses.” While GREF handles work and living arrangements, the Procure- ment team develops contracts and secures suppliers. “Often, there are limited suppliers to choose from and logistics challenges. We also have to understand the rules and
regulations in the specific country and develop the right agree- ments,” Marsh says. There is continual planning to make sure that resources and services are available in remote locations. “When you’re drill- ing 120 miles offshore South America and something breaks, you can’t pick up the phone and get a replacement part delivered immediately,” Marsh says. “One of the first contracts we put in place for drilling campaigns is a shore base for materials and equipment. An idle rig waiting for equipment can cost hundreds
of thousands of dollars a day.” Providing infrastructure for in- formation technology can also be challenging. “We may be operat- ing in an environment with harsh conditions, such as the North Slope of Alaska, where below- freezing temperatures and polar bears are a threat, or in politically unsettled locations like Basra, Iraq,” says Kellie Canaday, whose team sets up IT infrastructure and communications for upstream locations worldwide. “Security issues and logistics can make getting people and equip- ment into a location very chal-
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“We help the business focus on its core job of finding and producing oil.” Peter Sturla Global Real Estate and Facilities Angola project manager
In Papua New Guinea, more than 360 employees will work in the ExxonMobil Haus, which features an open, collaborative work environment.
Concentrating on people But the underlying impact of GSC’s involvement at frontier sites is its capability to provide safer, more secure, productive and cost-effective offices and housing for employees. Along with that goes the installation of computer and telecommunica- tions systems and the purchase and delivery of needed equip- ment and supplies. “You want explorers to explore, developers to develop and producers to produce,” Clare says. “Our team’s business is to give ExxonMobil employ-
lenging, she adds. “Often, the sites lack basic infrastructure, and when there are no existing networks we can tie into, we deploy satellite and microwave services to provide network capabilities. As projects evolve, we work to develop more permanent communication solu- tions, such as fiber optic cable.”
When offices become opera- tional, the company hires local workers to oversee office man- agement and to provide procure- ment, contracting services, IT and other support. “ExxonMobil develops the national workforce, optimizing skills and bringing our global knowledge and expertise to train local engineers, human resources folks, procurement specialists, real estate professionals and security personnel so that they can oper- ate our sites consistently any- where in the world,” Sturla notes.
ees quality office space, secure residential facilities, and other technical tools and equipment so they can produce oil and gas.” “Partnership is key to our suc- cess,” Canaday adds. “We work closely with the business, and understand the direct impact their work has and the value it provides. From bringing up a site on day one with IT services to experiencing the startup of production opera- tions, there’s tremendous satisfac- tion in seeing these projects come to fruition.”
Lasting impact GSC’s support provides a
lasting positive effect on the local population, including job creation, skills development, and economic impact through local leasing and purchasing.
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