Canadian oil exploration company Groundstar Resources Inc expects to start drilling for oil in the Rupununi in May.

Agriculture Minister Robert Persaud along with Takutu Oil and Gas Inc Office Manager, Dilorece South (left), examine a sample of oil from the well drilled at Karanambo in 1982. Takutu Oil plans to drill for oil in the Takutu basin later this year and opened its local office yesterday.

Preparations are underway at the location identified, with the airstrip being certified, a well being dug and construction beginning on accommodation, Office Manager of the company’s local subsidiary, Takutu Oil and Gas Inc, Dilorece South said. She cautioned, however that there are still a lot of logistics that has to be taken care of and the May date is tentative.

Groundstar has established Takutu Oil and Gas to drill up to two exploration wells in conjunction with its partner, Canacol Energy Limited. The first well, identified as Apoteri K2, will be drilled as a “deviated well” to test the oil bearing fractured reservoir discovered in Karanambo #1 in a more favourable structural position.

The company hosted a cocktail reception at its newly established Georgetown office last evening and South, noting that if the company is successful, asserted that it will also be the people of Guyana who will be successful.

Agriculture Minister, Robert Persaud, performing the duties of the Prime Minister, noted that oil had previously been discovered at Karanambo, though not in commercial viable quantities, and this “gives us hope.” He expressed optimism that Guyana will be seen in the future as an oil producer. Further, he pointed out that by the second half of this year, Guyanese will see rigs both on land and in the sea which he stated is a good sign. Another Canadian oil exploration company, CGX Energy, is expected to begin drilling in the Corentyne in the second half of this year.

Persaud stated too that in the context of the Low Carbon Development Strategy, there is a role for the petroleum sector and he emphasised that there is no conflict.

He wished the company well, noting that if oil is found in viable quantities, it will mean a lot for Guyana.

Last December, Canacol had announced that its joint venture partner, Groundstar was tendering for a drilling rig and associated services in order to drill the K-2 exploration well in the second quarter this year. “The bottom hole location for the K-2 well will be approximately 400 meters northwest of the Karanambo 1 discovery well and will target the same productive reservoirs that tested light oil in 1982. The joint venture to date has completed the construction of the drilling pad, access roads, and staging areas in preparation of drilling,” a statement from the company had said.  In addition, the joint venture has purchased the tubulars and wellheads for the drilling of up to 3 wells, which were shipped to Guyana in preparation of drilling the K2 well.

Groundstar was awarded its Takutu basin Petroleum Prospecting Licence (PPL) on July 13, 2005. In 1982, Home Oil had discovered high quality crude oil in the fractured Lower Jurassic Apoteri volcanic and Manari sedimentary reservoirs in the Karanambo #1 well and this, a statement from the company said, was proof that the rift basin had an active petroleum system and the commercial oil could exist in the basin.

Three large structural prospects with potential for fractured Apoteri-Manari objectives were defined, namely Apoteri K2 Offset, Pirara River and Rewa. “Substantial in place and recoverable oil resources could exist on any of the three prospects.

Conventional sandstone reservoirs are considered a secondary target in the Rewa Prospect and possibly elsewhere in the basin,” said the company.

South said that the company will drill to a depth greater than the Karanambo #1 well. Following the evaluation of the drilling and testing results, a decision will be made as to where a second well in the basin will be drilled, the company said.

Canacol, a Calgary, Alberta-based company has a 65% non-operated working interest in the Takutu PPL. Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in the Middle East, North Africa and South America.