Monday, October 2, 2023

Deepwater action remains in play offshore Guyana

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Guyana topped the oil discovery charts again in 2019 with the Liza field coming onstream in December and another billion barrels added in the ExxonMobil operated Stabroek licence with some more gas also. The resource estimate for Stabroek was again updated in January, pushing the total to more than 8 billion barrels of oil equivalent resources.

Westwood Global Energy Group notes that although there were five commercial discoveries made offshore Guyana in 2019, it was not all plain sailing.

“The Tullow operated JV made two play opening discoveries that first sounded promising but turned out to be heavy and sour, contributing to a dramatic fall from grace for Tullow with its share price crashing,” Westwood said.

Already the oil volume discovered and planned for development is increasing exponentially. Zürich-based investment bank Credit Suisse has said it sees potential at Guyana’s Stabroek Block for 9 development phases that would push production well above 1 million barrels of oil per day and expects the resource estimate on the block to further increase beyond the more than 8 billion barrels of oil equivalent resources.

Westwood said there is still much to learn about both the plumbing of the petroleum system and the robustness of the political system.

Since results from a March 2 presidential election has not yet been finalized, the cracks in the South American country’s political system has been widening and is becoming the biggest threat to its stability. Project delays as a result of this ongoing crisis could cost the country hundred of millions of US dollars one energy official in the Caribbean region has said.

With an estimated queue of ~50 additional prospects on the block left to evaluate, Credit Suisse said ExxonMobil is currently planning for five additional exploration wells this year. The investment bank said the next step for Exxon and its Stabroek coventurers, Hess and CNOOC to monitor, include the Hassa – 1 exploration prospect and tests at the Yellowtail and Longtail discoveries, with a fifth rig expected to be deployed by 2Q20.

Meanwhile in the Guyana-Suriname basin, Westwood believes the industry will nonetheless continue to try to push the boundaries of the play beyond the Stabroek licence into both shallower and deeper Guyanese waters.

The significant discoveries offshore Suriname this year are the first commercial deepwater oil strikes outside of Stabroek which shows the play extends into the Dutch-speaking country.

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