Major oil firms to ramp up drilling in coming months

  • Feb 12, 2019
  • Guyana Chronicle

WITH the Orinduik Block offshore Guyana containing an estimated three billion barrels of oil and gas, Tullow Oil is preparing to drill for oil in the coming months.

Tullow Oil is one of three major oil companies that will commence exploration, thereby accelerating Guyana’s drilling programme, Director of Energy Dr. Mark Bynoe disclosed during a press conference at the Ministry of the Presidency on Monday. He said developments in the country’s budding Oil and Gas Industry has been centered around the operations of U.S Oil giant ExxonMobil in the Stabroek Block, however, three companies – Tullow, Repsol and CGX – have indicated that they will commence drilling soon.

“We expect one field to be drilled in the Orinduik Block by Tullow, one more in the Kanuku Block by Repsol and another in the Corentyne Block by CGX, with the latter two using what is commonly known as Jackups,” Dr. Bynoe said. He noted that a proposal for acceleration and exploration drilling on the Canje is under discussion by the Energy Department.

The Orinduik Block is located just 11km from and up-dip to ExxonMobil’s Liza discoveries. Tullow Oil holds 60 per cent working interest in the Orinduik Block while Eco Atlantic Oil & Gas has 40 per cent.

In a resource study dubbed “Competent Persons Report for Certain Assets in Offshore Guyana” published in September, 2018, it was estimated that the Orinduik Block contains a resource of around 2.9 billion barrels of oil and gas equivalent in 10 large prospects.

According to that report, the target reservoir rocks for the Orinduik Block are expected to be similar to the Cretaceous age reservoirs that were discovered on the neighbouring Stabroek Block by U.S Oil giant ExxonMobil at Liza, Payara, Pecora, Ranger, Hammerhead and Turbot.

According to a Production Sharing Agreement (PSA) inked between the Guyana Government, Tullow Guyana B.V and its partner Eco Atlantic, Guyana could benefit from as much as 60 per cent in oil profit, including a one per cent royalty once the companies commence pumping for oil in the Orinduik Block.

In the case of Repsol Exploration Guyana, if its exploration in the Kanuku Block is found to be feasible, the country could benefit from as much as 60 per cent in oil profit, according to a Petroleum Agreement signed between the Government of Guyana and Repsol Exploration S.A.

CGX Energy Inc. long promised to ramp up its exploration activities. In 2017, the Canadian oil and gas exploration company, successfully renegotiated its work commitments for the Demerara, Corentyne and Berbice Petroleum Prospecting Licences with the Government of Guyana.

In 2017, when it unveiled its five-year plan, CGX said it would drill an exploration well at the Corentyne Block by November 27, 2019; acquire additional seismic or conduct seismic reprocessing by November 27, 2020; drill an exploration well by November 27, 2022 in the Demerara Block; complete any additional data processing and planning, and secure all regulatory approvals for the drilling of an exploration well by February 12, 2020; drill an exploration well by February 12, 2021 and another by February 12, 2023 in the Berbice Block.

Also, complete a geochemical survey of a minimum area of 120 square kilometres and commence a seismic programme defined by the aforementioned geochemical survey by February 12, 2020; complete the seismic programme and complete all processing and interpretation of data by August 12, 2021 and drill an exploration well by February 12, 2023.

Meanwhile, Energy Director said the Stabroek Block Exploration Project continues to churn out successes above the normal industry level, as he alluded to ExxonMobil’s two most recent discoveries at Tilapia-1 and Haimara-1 wells. To date a total of 12 discoveries have been made on the Stabroek Block to 12.

Dr. Bynoe noted that while the discoveries signal well for the people of Guyana, they are leading to a more complex form of field development that will incorporate gas development as well.

“For example, four of the 12 discoveries have been in the Turbot area alone, with inter alia indication for a gas export scheme centered around the Turbot area as there are more associated gas in these fields, than previously projected,” he said.

According to ExxonMobil, there is potential for at least five floating, production storage and offloading vessels (FPSO) on the Stabroek Block producing more than 750,000 barrels of oil per day by 2025. The Liza Phase 1 development is expected to begin producing up to 120,000 barrels of oil per day in early 2020, utilising the Liza Destiny FPSO.

Aside from the two recent discoveries, the Stabroek Block has an estimated recoverable resource of more than five billion oil-equivalent barrels. The resources of Tilapia-1 and Haimara-1 wells are still being assessed.

As the country prepares for increased exploration, the Energy Department is working with its partner institutions, in an effort to put the requisite framework to ensure that all Guyanese benefit from the discoveries and their developments.