Spanish oil company Repsol Exploration, which drilled its first development well in the Kanuku Block offshore Guyana in 2019 through its local arm, has moved to explore a new well in the Block that will conclude next month.
This was announced by the Maritime Administration Department (MARAD), in a notice to mariners in which notified that exploration drilling on the Beebei-1 well site will last from May 21, 2022 to July 15, 2022.
It was explained by MARAD that “the well site is situated approximately 72 nautical miles (133.344 kilometres) from the Coast of Guyana and covers an area of 0.29 square nautical miles (1 square kilometre).”
Exploration activities will incorporate the use of the Offshore Support Vessel (OSV) Polaris.
The notice from acting Harbour Master Glasgow Archer warned that “all mariners are required to stay clear of this [drilling] vessel and navigate with extreme caution when in the vicinity.”
In February 2020, Repsol had applied to the Environmental Protection Agency (EPA) to drill a number of wells in the Kanuku Block, one month after it was announced that the oil found in the previous well it had drilled would not be commercialised.
According to the EPA, Repsol applied to drill and appraise multiple exploration wells in the Kanuku Block. It was noted that the exercise could affect air and water quality, as well as wildlife. As such, the Agency noted that an Environmental Impact Assessment (EIA) was needed.
In September of 2019, Repsol had started drilling the Carapa-1 well in the Kanuku Block. That well alone was reported to cost US$20 million and was drilled using the Valaris EXL II jack-up rig. However, while approximately four metres of net oil pay was found, British-owned Tullow Oil, which owns a stake in the Kanuku Block alongside Repsol, had announced that it would not be commercialising the well.
Repsol is the operator of the Kanuku Block, with a 37.5 per cent stake. Tullow Guyana BV also holds an equal 37.5 per cent stake while Total E&P Guyana BV has the remaining 25 per cent. When it comes to Tullow, Carapa was its third oil find offshore Guyana.
However, in November, Tullow revealed that samples from its previous discoveries at the Jethro-1 well in August and Joe-1 well in September in the Orinduik Block showed heavy crude with high sulphur content – a variety of oil that is less economically viable than the light, sweet crudes found by US oil giant ExxonMobil right offshore Guyana in the neighbouring Stabroek Block.
Guyana has been declared one of the fastest growing economies in the hemisphere, with growth projections of 47 per cent, on the back of the oil industry offshore Guyana and specifically, the oil discoveries in the Stabroek Block.
The oil-rich Stabroek Block is 6.6 million acres (26,800 square kilometres). ExxonMobil, through subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
ExxonMobil has said it anticipated at least six projects offshore Guyana would be online by 2027. The Liza Phase 1 project has been producing oil since 2019 and production started this year on the Liza Phase 2 project. It is expected that production will increase to 220,000 barrels of oil per day with the Liza Unity Floating Production, Storage and Offloading (FPSO) vessel.
The third project –the Payara Development – will meanwhile target an estimated resource base of about 600 million oil-equivalent barrels and was at one point considered to be the largest single planned investment in the history of Guyana.
Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, is now slated to be the single largest development so far in terms of barrels per day of oil, with a mammoth 250,000 targeted.
