Tuesday, December 6, 2022

So far only Stabroek has delivered the goods…what’s next?

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OilNOW
OilNOW is an online-based Information and Resource Centre

High impact wells will continue to dominate global offshore exploration this year with mainly the big prospects being of significant interest to oil majors and larger National Oil Companies (NOC). The Guyana-Suriname Basin remains at the top of the list for highly prospective basins with the Stabroek Block being the most lucrative license, having already delivered over 10 billion barrels of oil equivalent resources for ExxonMobil and co-venturers Hess and CNOOC.

According to consultancy group Wood Mackenzie, drilling in the more recently discovered super plays in Guyana and Suriname will continue, although perhaps with lower success.

“Most explorers’ eyes have been on the western Atlantic Margin for the last few years,” WoodMac said in a report seen by OilNOW. “We have watched red-hot bid rounds in both Brazil and Mexico and a Guyana drilling campaign that seemed unrelentingly positive. A few years on, these stars may be fading as others rise across the ocean.”

WoodMac said Brazil’s pre-salt play has proved much more challenging to extend than enthusiastic bidders expected and none of the wells drilled in the new blocks have as yet made a commercial find.

Meanwhile, discoveries in Mexico have been few and mostly too small for standalone development, similar to oil strikes outside of Guyana’s largest block.

“Guyana’s lustre has dimmed as explorers struggle to extend the basin’s spectacular success beyond the Stabroek Block and its Liza trend sweet spot,” WoodMac said, referring to multiple attempts to hit commercial crude beyond Stabroek at the Kaieteur, Canje, Orinduik and Kanuku blocks. A drill campaign will also wrap up soon at the Corentyne Block.

So far, discoveries outside Stabroek have resulted in a combination of non-commercial and heavy oil finds which make it unlikely any one of these wells will be developed as a standalone discovery.

Why is finding oil outside of Stabroek block proving to be so challenging?

“Carefully selected deepwater drilling will continue only where explorers expect highly productive reservoirs,” WoodMac said.

And thanks to the high success rate, the discoveries at Stabroek in particular have one of the world’s lowest finding costs.

Norway-based Rystad Energy said Exxon’s investment in Guyana are only expected to grow, and so is the overall greenfield capex spent yearly in the region.

“Guyana will dominate for most of this decade, while Surinamese finds are set to get the green light over the next three to four years,” Rystad Energy said.

Exxon has so far sanctioned development of about 560,000 bpd of oil production capacity and this is expected to grow to more than 900,000 bpd in the next five years.

“In the medium term, the Guyanese oil fields are expected to produce about 1.4 million bpd,” Rystad Energy pointed out.

The next few years will see appraisal of the Stabroek discoveries Snoek, Haimara, Pluma and Whiptail. Also, despite failing to hit a commercial well beyond Stabroek so far, analysts say there will be expanding exploration outside the block that could potentially increase Guyana’s total discovered resources.

Explorer believes eastern portion of Orinduik block can deliver significant volumes

“My gut, and research from other similar situations tell me there’s definitely going to be substantial commercial finds outside of the Stabroek Block,” Arthur Deakin, Co-Director at Americas Market Intelligence (AMI) Energy Practice told OilNOW in a recent interview.

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