Spanish oil company Repsol has asked for an additional six months before making a decision on drilling which could see the company searching for oil offshore Berbice in 2017 rather than in 2016 as originally envisioned.
A statement from the Ministry of the Presidency said that Minister of Governance Raphael Trotman yesterday met with Repsol Exploration executives during a courtesy call at his office. The executives, Allan Kean, Atlantic Basins Exploration Manager and Giancarlo Ariza, Guyana Country Manager, used the opportunity to request an extension of six months to continue gathering seismic data on the Kanuku Block, where they are currently conducting exploratory work, the statement said.
“Repsol is currently required to commit to drilling or relinquish exploratory rights by the middle of November, 2015. A six month extension would give them up to May, 2016 to make a decision on drilling just one year before the projected drill date, which will remain at the middle of May, 2017,” the statement said.
It noted that Trotman, who was acting on behalf of President David Granger, who is responsible for the petroleum sector, said that the request would be favourably considered. Acting Commissioner of the Guyana Geology and Mines Commission Newell Dennison, who was also present at the meeting, is tasked with presenting a report to the President, before the request can be granted.
Trotman said that the President is eager to fast forward the development of Guyana for all Guyanese and sees the extractive sector as one that can provide “the fuel that can take Guyana from zero to 100 fast,” the statement said. He noted that the President is keen on expanding investments in the petroleum sector. Repsol also applied two years ago for exploratory rights for Ultra Deep water Block C, the statement said.
It noted that the company boasts of being the first to discover oil in Guyana in July 2012 when they began drilling at the Jaguar-1 well in the Georgetown Block and found the presence of hydrocarbons. Though that drill site did not produce oil in economic quantities, Repsol was able to gather significant seismic data that will be useful for future exploratory work. Trotman was presented with a sample of the hydrocarbons found at the Jaguar-1 drill site by the company.
In 2012, Repsol served as the operator for the consortium of companies, which also included YPF Guyana Limited, Tullow Guyana BV and CGX Resources Inc., which drilled the Jaguar-1 well. The well was abandoned after the company encountered very high pressures at intervals above target depth. Nevertheless, both government and Repsol have maintained that the results of the drilling carried out at Jaguar-1 were “encouraging.”
Following the termination of drilling on the Georgetown Block, Repsol allowed the Georgetown Petroleum Prospecting Licence (PPL) to expire and sought out a new PPL covering virtually the identical acreage offshore in Guyana, now known as the Kanuku PPL. The company was involved in litigation with oil explorer CGX Energy over the PPL but this has since been resolved.
On May 14, 2013, the Government of Guyana signed an agreement for petroleum exploration and production with Repsol which said that it hoped to begin drilling for oil in the ‘Kanuku Block’ off the Berbice River by 2016.
Repsol’s Director of Exploration in Latin America Joseba Murillas, who signed on behalf of the company, said at the time that they would be able to initiate necessary works almost immediately since it already had an operational office in Guyana.
The PPL, which was accompanied by a Production Sharing agreement, availed Repsol an area approximately 6,525 sq. km. within Guyana’s sedimentary basin, and approximately 100 miles seawards of the mouth of the Berbice River.
Repsol has been present on the Guyana scene since 1997.
In May, US oil company ExxonMobil Corporation reported a “significant oil discovery” at its Liza-1 well offshore Guyana.