The results from the Tanager-1 exploration well at the Kaieteur Block offshore Guyana announced on Tuesday brings back into focus the risky nature of exploration, even in a basin where the success rate has been well above 90 percent.
Since 2015, ExxonMobil has made 18 discoveries while encountering just two dry holes at the prolific Stabroek Block. The company’s first drill campaign at the adjacent Kaieteur Block saw it spudding the deepest well offshore Guyana at Tanager-1, which turned out to be non-commercial as a stand-alone development.
“Exploration in deepwater and ultra-deepwater is a high-risk high cost venture,” Kevin Ramnarine, former Trinidad and Tobago Minister of Energy said in a comment to OilNOW. “A sub commercial well like Tanager-1 is par for the course in exploration. That is the nature of the oil business.”
Ramnarine reminded that just recently, BHP’s deepwater well Broadside failed to find oil or gas in Trinidad. Broadside was also the deepest well ever to be drilled in T&T’s history.
‘The disappointment of Tanager-1 sends a message that prospective resources can only become commercial reserves if there is successful exploration drilling,” he said. “There are many variables at play here one of which is depth and the temperature at which the source rock is buried. This will vary across the basin. But the salient point is exploration is a risky and expensive business and sometimes it goes right and sometimes it goes wrong.”
OilNOW understands the drill campaign at Tanager (including plugging and abandonment) cost in excess of US$100 million.
The well reached a total depth of 7,633 metres and the results confirm the continuance of a Cretaceous petroleum system and the Liza play fairway onto the Kaieteur Block, down dip from Stabroek.
ExxonMobil, operator at the Kaieteur Block, said in a comment on Tuesday it will continue to evaluate the data from Tanager as it moves forward with the search for more hydrocarbon resources.
“We will evaluate the data we have gained through additional tests and analysis and will continue exploration activities across our acreage offshore Guyana, including in the high-risk frontier areas such as the Kaieteur and Canje blocks,” Janelle Persaud, ExxonMobil Guyana Public and Government Affairs Advisor said.
ExxonMobil holds 35% interest in the Kaieteur Block with Cataleya Energy Limited holding 25%, Ratio Guyana Limited 25%, and Hess 15%.