Global energy giant Repsol has applied to government for an exploration licence close to the Stabroek Block, where ExxonMobil reported a “significant oil discovery” at its Liza-1 well offshore Guyana last year.
ExxonMobil, meanwhile, is itself looking to acquire more acreage in proximity to the Liza-1 well.
“I would not deny that,” acting Commissioner of the Guyana Geology and Mines Commission (GGMC) Newell Dennison told Stabroek News when asked yesterday about the Repsol application.
Trade newspaper Upstream reported Minister of Natural Resources Raphael Trotman, on the sidelines of the recent Trinidad and Tobago Energy Conference last week, making the disclosure that Repsol was the only oil company to apply for Block C, an ultra-deepwater block to the north-east of Stabroek. He, however, said government has not begun final negotiations for the licence.
According to Upstream, Trotman said that to date government has chosen to award blocks via direct negotiation but if interests continue to grow they will consider a bid round for new blocks.
Sources here told Stabroek News that in light of the ExxonMobil find, there will be both new and renewed interests in areas nearby as global oil and exploration companies want to capitalise on the discovery. Sources also said that with the current low prices for oil exploration equipment, it makes sense to explore now. “You have to look at it this way: if oil prices begin going up tomorrow again, the cost for exploration equipment will also go up. So, it makes sense now, as you see that one company already found hydrocarbons in what can possibly be commercial amounts there [Stabroek Block], to now utilise cheap exploration avenues to analyse the geophysical structures and have that data available and possibly begin drilling yourself,” a source opined.
“ExxonMobil, on the other hand, already found something so it makes sense also for them to petition for the acquisition of deepwater areas close to where they are and as such will be able prevent potential competitors from accessing it and can now gather other raw data from those blocks,” he added.
ExxonMobil began oil and gas exploration in Guyana on March 5, 2015, drilling offshore in the Liza-1 well in the Stabroek Block. On May 20, the company announced that its exploration drill ship, the Deepwater Champion had made a significant oil find in the Block, about 120 nautical miles offshore Guyana.
In his presentation at the Energy Conference, Trotman had said that ExxonMobil is expected to commence by February or March to define wells for drilling.
Trotman also pointed to a host of other players interested in the petroleum sector. He cited long time players Repsol/Tullow in their Kanuku Block on the Atlantic shelf. Other licencees are CGX; Anadarko; new entrants Ratio, an Israeli interest; Mid Atlantic, a partly local interest; and Eco Atlantic/Tullow. On January 14, Guyana signed a Petroleum Prospecting Licence and Production Sharing Agreement with the joint venture team of Tullow Guyana B.V. and Eco (Atlantic) Guyana Inc. for a concession of 1801sq. km, called the Orinduik Block, just offshore Guyana. That agreement entails a work programme involving a geological and geophysical evaluation, which will inform a 3D seismic acquisition, all within the initial 10-year period of the licence which is ten years.
While there are many opportunities, Trotman said that the country remained dangerously yoked to fossil fuels – 13,042 barrels per day. In line with its focus on green energy and development, he noted that in the future Guyana could be using more renewables and selling its oil.
“Infrastructure and viable energy options remain a challenge, and hopefully, with vision, planning and expected revenues, we can provide an energy mix that sees us using more renewables and selling the vast majority of our hydrocarbons”, Trotman said.