Tullow Oil plc (Tullow) announced on Monday that the Marina-1 exploration well drilled on the Z-38 licence offshore Peru reached Total Depth and has not encountered significant hydrocarbons.
The well tested the La Cruz and Mal Pelo formations where minor gas shows were encountered but there were no indications of hydrocarbons in the primary targets in the Tumbes formation.
The Stena Forth drillship drilled the Marina-1 well to a Total Depth of 3,022 metres in 362 metres of water and the well will now be plugged and abandoned.
Karoon Energy is the operator of the Marina-1 well through its wholly owned subsidiary, KEI (Peru Z‐38) Sucursal del Peru and has a 40% operating equity interest. Tullow Oil holds a 35% interest with Pitkin Petroleum holding the remaining 25%.
“This is the first ever well in the deep-water section of the under-explored Tumbes basin. We will now integrate the important well information with the seismic data that we are currently reprocessing and update our prospect inventory for blocks Z-38 and Z-64. Tullow is building an extensive exploration position in Peru and, while this result is not what we had hoped for, we remain positive about Peru’s wider offshore exploration potential,” Mark MacFarlane, Chief Operating Officer said.
The Peru dry hole follows the company’s decision to cut jobs in Kenya by about 40% as part of a company-wide restructuring following poor performances at its Africa and Guyana operations.
The company has said exploration write-offs for 2019 of approximately $1.5 billion dollars include the Jethro, Joe and Carapa wells offshore Guyana where a combination of high sulfur (Jethro & Joe) and low volumes discovered (Carapa) have made commercialization potentially unfeasible.
The Carapa discovery, Tullow’s first for 2020, came after a calamitous 2019 in which its stock declined 64% and the chief executive officer and exploration chief stepped down.