Exxon Is Back in Brazil—and Betting Big on Deepwater Oil

In November 2010, Exxon Mobil Corp. dispatched workers to a platform off the coast of Brazil, hoping to strike oil in one of the energy industry’s most anticipated drilling programs. About 2,300 meters (1.4 miles) below the surface, they bored into the seafloor, drilling down more than 2 miles over the course of almost two months before coming up dry. It was Exxon’s third dry hole in the area in just over two years. Defeated, the company abandoned exploration in Brazil. Now, seeing the success others are having there—and running into trouble elsewhere—Exxon’s back.

In an industry shifting toward renewables, Exxon is betting on Brazil as part of a $200 billion, seven-year capital-spending plan that’s remarkably large and focused on fossil fuels. A string of setbacks with projects in Canada, Russia, and the U.S. pushed the company to return to Latin America’s top oil-producing nation as it seeks to revive years of stagnating production. Brazil is the least developed among Exxon’s major projects—which also include Guyana, the U.S. Permian Basin, and gas terminals in Mozambique and Papua New Guinea—but it offers the most substantial potential prize: The country’s deep waters are the site of the largest offshore oil find this century.