EXCLUSIVE-Trinidad, ExxonMobil agree to terms for deepwater blocks, government sources say

By Curtis Williams

HOUSTON, Aug 5 (Reuters) - Trinidad and Tobago's government has agreed to award U.S. oil major ExxonMobil XOM.N acreage in an ultra-deep area that includes seven blocks to explore for oil and gas, two senior government officials told Reuters.

The parties began negotiations earlier this year for the areas off the east coast of the Caribbean country, which ExxonMobil left more than 20 years ago. The blocks are located northwest of ExxonMobil's prolific Stabroek block in Guyana, where the consortium it leads has confirmed more than 11 billion barrels of recoverable resources.

ExxonMobil and the Trinidadian government could sign the agreement as soon as next week, according to the people with knowledge of the negotiations, who were not authorized to speak publicly.

The area to be awarded to ExxonMobil is an amalgamation of seven blocks, and has been renamed Ultra Deep 1 or UD(1). The area covers water depths of 2,000 to 3,000 meters, the people told Reuters.

"We will not comment on third party sources, but we routinely look at opportunities to optimize our advantaged portfolio," an ExxonMobil spokesperson told Reuters.

Trinidad and Tobago Energy Minister Roodal Moonilal did not respond to a request for comment.

"Ultra-deep Trinidad and Tobago could unlock potential similar to ExxonMobil's Stabroek block," according to a 2024 study by Houston-based energy data analytics firm TGS.

In Guyana, ExxonMobil and partners Chevron CVX.N and CNOOC 600938.SS are about to begin production at their fourth floating facility, which will expand its capacity beyond 900,000 barrels per day (bpd), less than six years after beginning oil production in the South American country. The group plans to produce up to 1.7 million bpd by 2030.

During a press briefing last week, ExxonMobil CEO Darren Woods said exploration is part of a three-pronged approach to ensure that the company continuously replaces the oil and gas it produces.

"We're continuing to have a very consistent and focused effort on finding more resources that will be economically advantaged and competitive in our portfolio." Woods said.

WORK TO DO

ExxonMobil has agreed to a signing bonus and a three-phase exploration program in Trinidad that includes the acquisition of seismic data and drilling of exploration wells, the two sources said.

If oil or gas is found, the agreement also includes royalty payments and a share of the profits to the government, along with a provision for cost recovery, the sources said.

ExxonMobil first approached the Trinidadian government in November of 2024 with interest in the seven blocks, they added.

Trinidad and Tobago is in the middle of a deepwater auction that has been extended to close on September 17 and excludes the areas ExxonMobil is interested in.

According to Trinidad's laws, the government can individually negotiate areas for exploration and production if they are not included in a competitive bidding round.

Trinidad has been trying to rejuvenate investment, especially offshore, where more gas output is needed to support the nation's liquefied natural gas and petrochemical industries. But it is also hoping to find oil in its deep waters.

A flagship offshore gas project with neighboring Venezuela recently lost its U.S. authorization to move forward and has been shelved. It was expected to help relieve some of the country's ongoing gas shortages.