London-based Tullow Oil has hit water in the Beebei-Potaro exploration well, drilled in the Kanuku Block offshore Guyana.
In a statement issued on Friday, Tullow announced that drilling operations have been completed at the Beebei-Potaro well, which has been plugged and abandoned following these results.
“The well encountered good quality reservoir in the primary and secondary targets, but both targets were water-bearing,” the oil company has said.
The Noble Regina Allen rig drilled the Beebei-Potaro well to a total depth of 4325 metres in 71 metres of water.
While Spain’s Repsol is the operator of the Kanuku Licence with a 37.5 per cent working interest, Tullow holds 37.5 per cent, with TOQAP holding – a joint venture between Total E&P Guyana and Qatar Petroleum – holding the remaining 25 per cent.
According to Friday’s statement, Tullow said it would integrate the well results into its regional subsurface models, and work with its joint venture partners before deciding on next steps. Previously, Tullow had encountered oil at the Carapa-1 in the Kanuku Licence, but not in commercial quantities.
Several international reports, including from Reuters, have reported that Tullow has been focused on its successful operations in Africa. A Reuters article on Friday reported that Tullow had previously said it would limit capital exposure in Guyana, and would possibly be selling a portion of its stake to another company. But the article noted that the company has so far not announced any plan to do so.
Last November, Tullow was confident of the exploration results from the Kanuku Block, which is adjacent to the oil-rich Stabroek Block.
“In Guyana, the Kanuku JV Partners plan to drill the Beebei-Potaro commitment well in mid-2022, targeting in excess of 200 mmbbls gross mean unrisked prospective resources across two targets,” Tullow had said back then.
In addition to its interest in the Kanuku Licence, Tullow is also the operator of the Orinduik Block offshore Guyana, where it has made two other discoveries at the Jethro-1 and Joe-1 wells.
However, those findings showed heavy crude with high sulphur content – a variety of oil that is less economically viable than the light, sweet crude found by United States oil giant ExxonMobil in the neighbouring Stabroek Block.
As the operator of the Orinduik Block, Tullow holds 60 per cent working interest, while Eco Atlantic hold 15 per cent and TOQAP holds the remaining 25 per cent.
In March 2021, the Government of Guyana granted Tullow Oil and its partners an extension of its prospecting licence in the Orinduik Block until 2023. Eco’s Chief Operating Officer, Colin Kinley, had stated at the time that the joint venture partners would continue their exploration activities with the use of available geophysical data and evaluations of their Joe and Jethro wells’ discoveries.
“The partnership is focused on its multiple light sweet oil prospects on the Orinduik Block, and we are high-grading candidates for the next drilling program, with the Operator expected to select targets later this year. We will update the market on further drilling plans in due course on our opportunity and prospects in this prolific oil basin,” he was quoted as saying.
The Orinduik oil block is just a few kilometres from ExxonMobil’s discoveries in the Liza and Payara fields. It is under administration of Eco Guyana and Tullow.
It has been a rough few years for Tullow, which in 2020 was forced to write off US$1.2 billion in wells that were not financially viable. Included in the 2019 amount is US$60 million for three wells Tullow drilled offshore Guyana, but could not continue working thereon.
