Wednesday, June 7, 2023

Tullow writes off US$97.7 million in Guyana expenses

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Tullow Oil has written off US$97.7 million in costs related to the Kanuku and Orinduik blocks. 

Kanuku block write-offs amount to US$75.3 million, related to unsuccessful well costs, as well as license relinquishments. Repsol, the operator, drilled the Beebei-Potaro well in 2022, and announced in August that while the well encountered good quality reservoir in the primary and secondary targets, both were water-bearing

Tullow had said it will integrate the well results into its regional subsurface models and work with the joint venture before determining the next step. The Kanuku block license is expected to come to a natural end in May, 2023. The partners have given no indication that they will seek an extension, and are expected to relinquish the block. 

The Orinduik block write-off amounted to US$22.4 million, related to license relinquishments. January 13, 2023 was the natural conclusion date of the first phase of the license, at which relinquishment of 20% of the 1,800 sq. km block was due. The Tullow-operated block saw no exploration drilling in 2022. 

In that year, OilNOW learned that the partners were revisiting the commercial potential of the heavy Jethro oil discovery, which was made in 2019, due to the sustained high oil prices caused by Russia’s invasion of Ukraine. They sought a third-party consultant with heavy oil development expertise to answer technical queries and provide an initial assessment of the several potential development drilling and production scenarios, Tullow’s partner Eco (Atlantic) had said. 

The characteristics of the discovery appeared favourable for the utilisation of a floating production facility, but the decision did not materialise. The partners are currently in the second license phase and are expected to drill at least one light oil Cretaceous target in the next 12-18 months. 

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