As the work week began, Guyanese awoke to news that a second oil major had found a large quantity of oil and gas in an offshore oil field south of where American supermajor ExxonMobil has so far drilled 13 successful wells since 2015, pointing to the possibility of Guyana sitting perhaps on some of the world’s largest deposits of sweet light crude.
Tullow Oil of the United Kingdom said its Jethro-1 well, less than 10 miles from two of Exxon’s largest Stabroek Block finds so far, had contained the equivelant of about 15 stories high and about 15 miles wide of light crude in a concession called Orinduik. Officials say that the find could well mean that most of the companies with concessions in and around that area could strike black gold in the coming months, making the Caribbean Community nation one of the richest and most powerful countries in the hemisphere. The concession is dominated by Tullow and Eco Atlantic Oil and Gas out of Toronto. Exxon has only missed out with dry wells twice in the past four years.
Clearly energized by the find, Gil Holzman, chief executive of Eco Atlantic, told Proactive Investors “that’s a lot of oil. The quality of it. The porosity of it. The fact that the entire sandstone is soaked with oil and bringing out the samples was so easy gives us a lot of confidence that next year with a simple appraisal we can actually consider this Jethro-lobe alone as a stand-alone field. The entire standstone is socked with oil,” he said.
To the administration of of President David Granger who faces general elections by yearend, the announcement meant that this latest find by a company other than Exxon in a new block has further de-risked the Guyana Basin as well as the fact that the country is now sitting pretty on proven reserves about about seven billion barrels so far.
Tullow and Eco plan to drill at least one other well before the close of 2019, but by then, two others with concessions near these two proven fields, would by also have drilled four more wells during the same period.
Repsol of Spain and CGX Energy Inc of Toronto, have already given notice to kickstart their drill program and are mobilizing to do so. The department of energy says it is thrilled at the pace of development even though it and government have justifiably been roundly criticized for not getting all the relevant laws in place and local content mandates up and running, almost five years after the first announcement. Exxon is planning to begin actual production as early as late November once its massive Floating Production Storage and Offloading (FPSO) vessel arrives in Guyana and is hooked up to wells just waiting to gush.
“The department is encouraged by the prolific rate of discovery in Guyana and will continue to work assiduously and conscientiously to extract optimum value from these resources for all the peoples of our country,” said Director Mark Bynoe. “This is a major development for Guyana as it adds to the further de-risking of the deep and ultra-deep zone. Furthermore, it offers significant potential for the diversification of the hydrocarbon production base.”
Officials says a find by any or both of these companies will make Guyana the Saudi Arabia of the hemisphere as both are in separate blocks from Exxon and now Tullow. As news of the discovery spread, authorities in neighboring Suriname where both Exxon and Tullow have interests, celebrated as the area is southeast of the city and closer to the border with the Dutch-speaking fellow CARICOM nation, yet to find offshore oil. Suriname produces about 16,000 barrels daily from onshore wells across the border Corentyne River with Guyana.
Rudolf Elias, general manager of state-owned Staatsolie says that “that is good news for Suriname. I maintain that it is only a matter of time before a major oil discovery is made in the offshore sector in Suriname. Every major discovery in Guyana benefits Suriname. It is a kind of puzzle that needs to be solved to find out where the oil is. Now Tullow also has the key and the puzzle can be solved faster.”
Regionally, Jamaica recently reported oil slicks both on and offshore and thinks it is also just a well away from a gush. Again Tullow is one of the major operators, while Prime Minister Keith Mitchell of Grenada last year announced evidence of oil and gas off the coast of a country near Trinidad, an oil and gas producer for more than 100 years.