Global financial crisis will affect local oil quest – PM

– existing operations likely to continue

The global financial crisis will have an effect on petroleum exploration activities in Guyana though existing oil and gas explorations are expected to continue as well as drilling programmes anticipated to begin this year.

Initial seismic mapping work by several oil exploration companies have been completed while the Guyana Geology and Mines Commission (GGMC) has drilled a relatively shallow hole at the edge of Lethem, which revealed the “expected indications” of petroleum and evaporites, Prime Minister Samuel Hinds said on Friday.

Speaking about the petroleum sector at a press conference on the 2008 performance of the mining industry, Hinds said existing petroleum exploration is expected to continue this year. He noted that exploration companies, CGX and Repsol have completed 3D seismic shooting on their offshore leases. “Evaluation should lead to a decision by year end to drill or to proceed to drilling at one or more location,” he stated. He said too that 2D seismic shooting within the Esso reconnaissance area has been completed and the data will be evaluated during this year.

The Prime Minister, who is the minister responsible for mining, declared that interest continues in the near onshore and in the Rupununi basin, where Groundstar is making preparations to drill one or two wells this year. A printed copy of his remarks also said that a drilling programme of up to four wells is expected to begin this year in the near on-shore area from the Corentyne to the Mahaica.

He acknowledged too that the recession would certainly affect oil exploration and on Repsol’s plans, while it was noted that it was “early days yet”, Hinds said that once the data is evaluated, more money would have to be “put up” and he has heard estimates for drilling a well, which the company hopes will become a development production hole. He added that prevailing costs will determine whether production will be entered into at the time or not.

Meantime, the Prime Minister disclosed that a GGMC relatively shallow drill hole on the edge of Lethem revealed the “expected indications” of petroleum and potash. “Considerations are being given to drilling a larger, deeper hole at that location…,” he said.

Further, he stated that government was aware of the practice at times, such as these, to spread prospecting costs and risks and has recently approved Repsol “bringing in” petroleum company Tullow, and rearranging its retained shareholding among two of its subsidiary companies. Additionally, he said, the government recently approved Esso bringing in Shell into its offshore holding.

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