There has been growing interest by oil companies in re-exploring the Takutu Basin, located in the southern part of Guyana close to the Brazilian border, and according to Natural Resources Minister Vickram Bharrat, this is presently under discussion by the Government.
During his presentation on the second day of the International Energy Conference and Expo at the Guyana Marriott Hotel, Minister Bharrat confirmed that the onshore basin, which was first explored in the early 1980s, is attracting renewed interest.
“We would have started oil exploration I think in the 1940s, 1950s. Oil exploration is not new to Guyana; it was started way back in the Takutu Basin. The Takutu Basin is located in Region 9, that is close to Brazil, very close to Brazil.
“As a matter of fact, it is just two hours’ drive into Brazil. With the bridge and the road, it can be less than that. However, due to the infrastructure at the time and the lack of the type of technology and equipment that we have today, exploration activities were halted at that time,” the Natural Resources Minister said.
According to Minister Bharrat, the question of whether to allow exploration activities in the block is being discussed by the Government, along with what to do with the other oil blocks that are still to be explored.
“There has been some interest recently on the Takutu Basin, which is something our Government is discussing presently. How do we move forward with that, along with the other blocks offshore,” Minister Bharrat said.
The Takutu Basin had previously been drilled by various companies. According to information supplied by the Guyana Geology and Mines Commission (GGMC), the Karanambo-1 well was drilled by Home Oil Company in the Takutu Basin in 1982.
“This was the best prospect drilled within this Basin, located in southwestern Guyana. A small amount of light crude was accrued. Tests conducted on samples from Karanambo-1 found that the oil is of good quality (420API) and is of a “sweet” variety; that is, it contains less than 0.5 per cent hydrogen sulphide.
“However, its geological characteristics are mainly naturally fractured reservoirs, thus proving more difficult to find commercial petroleum than regular reservoirs,” GGMC further explained in its report on the basin.
Meanwhile, the other wells drilled in the Takutu Basin are Lethem-1 in 1980 (also drilled by Home Oil), Turantsink-1 in 1992 (drilled by Hunt Oil and its South Korean partners Yukong Ltd. and Sunkyong Group) and Apoteri K2 well in 2011 (drilled by Joint Venturers Canacol Energy Ltd and Takutu Oil and Gas Incorporated).
There has been growing interest by international companies in exploring Guyana’s available oil blocks. The Government is presently considering its options, which include an auction of the blocks with or without conducting 3D seismic surveys, and enforcing the various relinquishment provisions in the contracts signed by oil companies operating in Guyana’s waters.
The relinquishment clause is typically included in contracts so that companies can relinquish a portion of the block when the renewable period is up, thereby allowing other companies to buy into the respective blocks.
For the Stabroek and Canje Blocks, operators are required to relinquish 20 per cent of their blocks after the first renewal period; while those of the Demerara and Corentyne Blocks are expected to relinquish 15 per cent within this period.
The Kaieteur Block’s relinquishment provision is said to be 25 per cent, then 20 per cent by the first renewal; with the Mahaicony and Roraima Blocks at 25 per cent. By the time of the first renewal for the Orinduik Block, the operators are not expected to relinquish any portion.
Work is also expected to start this year on a model Production Sharing Agreement (PSA) that would improve on the PSA ExxonMobil signed in 2016 and ensure that Guyana can get increased benefits from future oil deals.
