Exxon drills dry hole in setback to Brazilian oil exploration

(Bloomberg) — Exxon Mobil Corp. drilled a so-called dry hole off the Brazilian coast, 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, according to Enauta Participacoes SA, an investor in the project. Exxon didn’t immediately respond to a request for comment.

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. Murphy didn’t respond to a request for comment.  

Brazil is one of Exxon’s top exploration targets 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.