French oil company Total expects two to three new offshore wells to be drilled in Guyana this year, Chief Executive Patrick Pouyanne says. This is despite encountering heavy crude at two prospects last year, which brought into question their commerciality, and the possibility of near-term future exploration offshore the South American country.
Offshore Guyana, UK-based Tullow Oil owns 60% and Total 25% of the Orinduik block, estimated to hold around 5.1 billion barrels of oil equivalent. Total also holds 25% in the Kanuku block, adjacent to Orinduik, in which Tullow holds 37.5%.
Tullow’s shares took a tumble in November after the company said its promising Joe and Jethro oil finds off Guyana were not as valuable as first expected due to the oil being tough-to-produce heavy crude. The oil at the finds in the Orinduik block has a specific gravity of 10-15 API and a very high sulfur content. Heavy crude is typically classified as 10-22 API, making the Guyana finds only slightly better quality than the extra-heavy crude from Venezuela’s Orinoco belt and the tar sands from Canada’s Alberta province.
Tullow Oil said this month it will reduce its headcount in Kenya by about 40% as part of a company-wide restructuring following poor performances at its Africa and Guyana operations.
Talk of a takeover of the UK oil company by Total was recently dismissed by Pouyanne who told Reuters the French major has no plans to buy out Tullow, whose share price slumped to 19-year lows in December over a string of bad news, stoking the takeover speculation.
While the Joe and Jethro wells at Orinduik produced heavy oil, calling into question the quality of the reservoir, other wells targeting deeper layers have produced lighter oil – reviving hopes for the commerciability of wells targeting the so-called Upper Cretaceous.
According to Reuters, Pouyanne said he expected two or three wells to be drilled offshore Guyana this year and a meeting with Tullow and their Orinduik partner Eco Atlantic Oil & Gas is due to take place this month to discuss next steps in this regard.
The explorers are no doubt enthused by the new 5.1 billion resource estimate at Orinduik and the fact that the block runs adjacent to the prolific Stabroek where ExxonMobil has so far found more than 8 billion barrels of oil equivalent.