Saturday, October 1, 2022

Rig count in Guyana-Suriname basin has doubled in 2 years

Must Read

OilNOW
OilNOW is an online-based Information and Resource Centre

By Hans Jacob Bassoe

Bassoe Offshore

Hans Jacob Bassoe

In the span of just five years, ExxonMobil has had 18 successful discoveries in the Guyanese Stabroek Block alone and proven recoverable resources of more than 9 bboe.  And the operator does not plan on slowing down any time soon. The U.S. oil giant, with its partners, plans to drill more than 12 exploration and appraisal wells over the coming year, including the potential 500 million boe Bulletwood prospect, which is being drilled as we speak. Meanwhile, Tullow Oil and Repsol have been active in the region, but with limited results. Tullow’s two discoveries in the Orinduik Block, Jethro-1 and Joe-1, in 2019 showed potential but proved to contain heavy crudes, while Repsol made a non-commercial discovery with its Carapa-1 exploration well in the Kanuku Block.

Suriname has also bagged a series of discoveries. Apache and Total recently announced a fourth consecutive oil discovery in Block 58, located adjacent to the Stabroek Block, with a fifth exploration well, BonBoni-1, also scheduled to be drilled this year. Meanwhile, Tullow Oil recently started drilling the Goliathberg Voltzberg North-1 (GVN-1) exploration well using ultra-deepwater drillship Stena Forth and Petronas also discovered oil last year when drilling its Sloanea-1 exploration well in Block 52 using ultra-deepwater semisub Maersk Developer.

It may still be in its infancy, but the Guyana-Suriname basin has already proven itself as a prolific and exciting region. This points to a high likelihood that rig demand will continue to increase, especially if some of these planned exploration wells meet expectations.

Rig activity to reach new highs

While nine rigs are already confirmed for work offshore Guyana and Suriname this year, in the past the highest number of rigs operating at once has been just seven units (between November 2019 and January 2020). ExxonMobil has been the busiest operator so far with four drillships on contract in Guyanese waters and plans to add drillships Stena DrillMAX and Noble Sam Croft in Q1 and Q2 2021. Noble and Stena are the two established favorites for ExxonMobil in the region and this year will have a total of six drillships working on continuously extended deals, under its Commercial Enabling Agreements (CEA), in the region. The U.S. supermajor typically takes rigs on a fixed period with multiple options thereafter. However, late last year, Noble Tom Madden was awarded a third contract extension for 6.5 years (until 2030), whereas ExxonMobil provided itself the flexibility to transfer awarded terms between the Noble Don Taylor, Noble Bob Douglas, Noble Tom Madden, and Noble Sam Croft.

In Suriname, there will be at least three floating rigs operating this year. Ultra-deepwater drillship Stena Forth commenced operations in late January on the GVN-1 exploration well for Tullow, while the ultra-deepwater semisub Maersk Developer is also on contract with Total, after it completed its one-well exploration contract with Petronas last year. The French oil major will also add a second Maersk rig, the drillship Maersk Valiant, in March as it looks to increase its drilling capabilities on Block 58. The Maersk contracts have an estimated combined duration of 500 days, with extension options thereafter. Meanwhile, drillship Noble Sam Croft will finish its contract with Apache in late Q1/early Q2 and move to Guyana for ExxonMobil.

Further players eyeing exploration

There are multiple oil companies that may also look to start exploration in the coming years, which will add even more rig demand. In its most recent market update, Tullow Oil reported that work continues on “developing the prospect inventory on the Orinduik and Kanuku (operated by Repsol) licences offshore Guyana”. Meanwhile, after several years of delays, CGX Resources is looking to drill wells in the Corentyne and Demerara blocks – two oil concessions offshore Guyana.

In addition, it is understood that Shell is planning to drill an exploration well in Block 42, off Suriname, which it recently acquired from Kosmos Energy after the latter company failed to discover hydrocarbons with its Pontoenoe-1 well in 2018. Additionally, Petronas may be planning a follow-up campaign off Suriname after it completes evaluation of its 2020 Sloanea discovery.

Just the beginning

The Guyana-Suriname basin is still only at its early stages of oil exploration and we can expect companies to ramp up exploration and development operations going forward. As new large hydrocarbon discoveries are made the region is providing some much-needed, near-term demand for drillers in a challenging global market and, combined with Petrobras’ ramping up of Brazilian operations and continued success off Trinidad, South America has become a global hotspot for drillers and oil companies alike. Two years ago, the Guyana-Suriname Basin counted four rigs on contract, since then it has more than doubled. Going forward not only will it be the oil companies drilling the wildcats that will be eagerly awaiting the results this year, but rig owners too.

Bassoe Offshore is a leading offshore rig brokerage, advisory and project development company based in Oslo, Norway with offices in London, Houston, and Aberdeen.

spot_img

Latest News

Whose is bigger? Brazil, Guyana will host world’s largest floating oil production vessels

Oil production vessels definitely have a wow factor. Their sheer size, processing power and capability of operating for decades...

More Articles Like This

spot_img