Coming on the heels of US oil giant ExxonMobil announcing the drilling of its maiden well in the Canje Block offshore, the Government of Guyana is anticipating more similar exploration and production activities there.
That was related by Natural Resources Minister, Vickram Bharrat, in a statement on Thursday.
On Tuesday, it was reported that Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary of ExxonMobil, has started drilling its first exploration well – Bulletwood-1 – in the Canje Block, marking the first foray into that block in search of oil.
According to Minister Bharrat, “The Ministry of Natural Resources is pleased with these reports, and looks forward to further prospects of exploration and production in this area.”
The Canje Block lies 180 km offshore Guyana in deep to ultra-deep waters with an area of approximately 4800 sq km. The operator of this block is ExxonMobil with a 35 per cent interest while Total also has a 35 per cent, JHI a 17.5 per cent, and Mid-Atlantic Oil & Gas Inc. a 12.5 per cent interest.
The Bulletwood-1 well is the first well to be drilled in the Canje block and was spudded by the Stena Carron drillship which commenced drilling on December 31, 2020, in a water depth of 2846 m.
This well is said to be extremely prospective with an environment of disposition unique among offshore Guyana blocks in that it contains both continental slope and basin floor terrain.
In fact, Bulletwood-1 is an Upper Cretaceous, confined channel complex prospect that targets approximately 500 million barrels of oil resource – similar to the profitable Liza Field wells in the Stabroek Block which the US oil giant also operates.
The announcement of the Exxon’s spudding was made by investment company Westmount Energy on Tuesday and followed recent notices from the Maritime Administration Department (MARAD) to vessel operators of the activities offshore.
Westmount, itself holding shares in the Canje Block by owning an indirect interest of 7.2 per cent through Exxon’s partner JHI Associates, also included comments attributed to its Chairman, Gerard Walsh.
According to Walsh, the campaign will evaluate deeper reservoir targets, with the possibility of boosting Westmount’s share value.
“Bulletwood-1 is the first well in a multi-well, fully funded drilling campaign being operated by ExxonMobil on the Canje Block over the next six months or so. This campaign will evaluate high impact Upper Cretaceous prospects in the proven Liza play fairway with, in some cases, additional deeper reservoir targets,” Walsh said.
He added, “It also provides Westmount shareholders exposure to a portfolio of drilling outcomes over a compressed timeframe. Success from some of the wells in this portfolio could result in transformational value changes for Westmount.”
There has been talk of spudding Bulletwood since last year. Besides Bulletwood-1, it is known that there are two other initial prospects in the Canje Block – Jabillo and Sapote. Based on information put out by Westmount previously, the Canje Block could hold as much as 10 billion barrels of oil in total.
Guyana began producing oil on December 20, 2019, in the Exxon-operated Stabroek Block which has more than eight billion barrels of crude, lifting its first million barrels of profit oil from the Liza-1 well in February 2020.
Oil tanker Cap Phillippe transported this lift from the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel, allowing Guyana to receive its first payment the next month.
That money, $11.4 billion, constituted Guyana’s first oil revenue-based earnings from production in the Liza Field. It was deposited in the Federal Reserve Bank of New York in March of this year.
An additional sum of $7.3 billion was subsequently deposited, as well as royalty payments. However, this money has remained untouched, as the protracted political crisis that followed the March 2nd General and Regional Elections sabotaged any attempt to set up a system for withdrawing funds.
The Natural Resource Fund Act stipulates that various committees must be established to provide oversight for the fund. It is expected that this legislation will be reviewed by the current Government this year.
Meanwhile, the US oil giant is currently preparing for its third potential development project in the Stabroek Block after Liza Phase 1 and 2.
The Payara development plan includes a floating production, storage and offloading (FPSO) vessel, named Prosperity which has the capacity to produce 220,000 barrels per day. The development will have up to 45 wells, including production wells, water injection wells and gas injection wells. It is slated for startup in 2024.
