ExxonMobil drilled a so-called dry hole off the coast of Brazil, a rare setback in the oil titan’s effort to expand its South American crude reserves.
The Cutthroat exploratory well failed to find significant quantities of oil or natural gas, Exxon said Monday following an announcement by Enauta Participacoes SA, an investor in the project.
“While the well did not encounter hydrocarbons, Exxon Mobil will continue to integrate the data from its findings into regional subsurface interpretation efforts in order to better understand the exploration potential” of the area, Exxon spokesperson Meghan Macdonald said in an email.
Exxon, which leads the project and owns a 50% stake, began drilling Cutthroat in late February in an ultra-deepwater region known as the Sergipe-Alagoas Basin off the northeast coast of Brazil.
Enauta owns a 30% interest and and Murphy Oil Corp. holds the remaining 20%. The Brazilian company dropped as much as 13%, while Murphy and Exxon declined as much as 12% and 3.7%, respectively.
Cutthroat is “one of multiple prospects that the partner group has mapped” in the region, Murphy said in a statement.
Brazil is one of the top exploration targets for ExxonMobil after years of heavy investment in the country’s offshore prospects. Farther afield, the company has made massive discoveries in Guyanese waters and has plans to drill off the coast of Colombia later this year.