Drilling for oil in Guyana for the first time in a decade commenced last Friday at the Takutu Basin in Region Nine.
The Apoteri K-2 exploration well is the first of two wells that Groundstar Re-sources Limited and its partners Canacol Energy and Sagres Energy plan to drill on their Takutu Block. “Groundstar Resources Limited is pleased to announce the planned spud of the Apoteri K-2 exploration well on the Takutu Block in Guyana prior to December 31, 2010 on the Karanambo prospect in the Takutu Basin,” the company said in a statement prior to the start of the drilling last week. The exploration well is a 600-metre offset to the Home Oil Karanambo-1 discovery well drilled in 1982.
Yesterday this newspaper was told that drilling had commenced on December 31. Officials at the local subsidiary, Takutu Oil and Gas Inc could not be contacted for official comment yesterday. However, a source said that that the “conductor hole” was spudded on December 31. This refers to the near surface part of the well. It was explained that the company is troubleshooting the drill and there are still some other operative aspects that have not yet reached the site. But “for all intents and purposes” drilling has started, the source said. The well will take about two to three months to drill depending on various factors.
Groundstar is the operator of the K-2 well and is carried for a 10% net interest to commercial production. The company’s statement noted that based on a December 2009 report compiled for Canacol, Gaffney Cline and Associates attributed gross mean recoverable prospective resources of 128 million barrels of oil to the prospect.
The statement said that plans are being formulated to drill a second exploration well on the block by May 2011 on either the Rewa or Pirara River prospects depending upon the outcome of the Apoteri K-2 drilling results. Canacol Energy will operate this well; Groundstar will be carried for a 10% net interest. The statement said that Gaffney Cline and Associates attributed gross mean recoverable prospective resources of 171 million barrels and 133 million barrels to each prospect respectively in the December 2009 report compiled for Canacol Energy.
The company had planned to begin drilling earlier but was hampered by several factors. Weather, which led to sections of the Linden-Lethem trail being rendered impassable a few months ago as well as some problems with customs led to delays, in setting up for drilling. In September, Groundstar had announced that it planned to begin drilling for oil in mid-October. In a statement, it had said that most of the drilling rig had arrived on the Apoteri K2 drilling location while the remainder was in the process of clearing customs in Manaus, Brazil prior to being mobilized to the location. The company had anticipated that the well will take 50 days to drill. Previously, the company had anticipated drilling beginning in August.
The operation is the first such major one here in ten years. Canacol Energy Ltd holds 90% interest in the Takutu Petroleum Prospecting Licence (PPL) while Groundstar has the remaining 10% working interest. The Takutu PPL contains the Karanambo discovery drilled by Home Oil in 1982.
In November last year, Canacol completed a farm-out agreement with Sagres Energy Inc whereby Sagres acquired a 25% interest in the exploration agreement by agreeing to fund 30% (US$1.25 million) of costs of drilling the K-2 exploration well; bringing Canacol’s net working interest to 65%. Under the terms of the agreement, the Corporation and Sagres will carry Groundstar’s 10% remaining working interest until first commercial oil production.
The joint venture plans to drill the Apoteri K-2 well to a total measured depth of approximately 11 000 feet. Up to September, Groundstar had said that it had completed the construction of the drilling pad, access roads, and staging areas in preparation for drilling, and has purchased and mobilized wellheads sufficient for 3 wells which are in the country. If successful the well will be put on a long-term production test to establish the deliverability and performance of the formations.
The last time that a well was supposed to be drilled here, in June 2000, Canadian oil exploration company, CGX Energy’s rig was chased out of Guyana’s waters by Suriname gunboats as it was about to embark on drilling a well in the most promising area.
This led to a diplomatic crisis between Guyana and Suriname and years of futile talks. The deadlock was broken when Guyana took its case to the International Law of the Sea tribunal and secured a ruling largely in its favour in 2007. Since then expectations have been high over CGX resuming its oil search.
The company has said that it expects to commence drilling here this after earlier saying that drilling could begin here in the latter part of last year. CGX has pushed back the expected drilling start a number of times.
The company says that the Jaguar well is planned to be drilled in the first half of 2011 while the Eagle well will be drilled after.
