The Government of Guyana (GOG) today signed an agreement for petroleum exploration and production with Repsol Explorations S.A. (Repsol), which says that it hopes 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 that they will be able to initiate necessary works almost immediately since it already has an operational office in Guyana.
Today’s signing was the culmination of discussions held between the Ministry of Natural Resources and Repsol which started in mid-2012 as the expiration of the Petroleum Prospecting Licence which was for the Georgetown Block offshore Guyana where the Jaguar-1 well was drilled loomed.
Repsol served as the operator for the consortium of companies, which also included YPF Guyana Limited, Tullow Guyana BV and CGX Resources Inc., which was granted a licence by the GOG to carry out similar prospecting and drilling operations at the Jaguar-1 well.
Operations at the Jaguar-1 well were abandoned after the company encountered very high pressures at intervals above target depth. Nevertheless, both the GOG and Repsol have maintained that the results of the drilling carried out at Jaguar-1 were “encouraging.”
Newell Dennison, Assistant Commissioner of the Guyana Geology and Mines Commission (GGMC) yesterday said that operations at the Jaguar-1 well created “cautious optimism about prospects for Guyana’s effort in promoting exploration for petroleum in that domain.”
Murillas, who seemed similarly impressed by the findings, said that “the oil recovered from Jaguar-1 was the first significant amounts ever recovered from offshore Guyana wells.” This discovery, he said, was very important as it provided certainty that “there is some amount oil to be recovered from these areas.”
He said however that “the key goal right now is to find volumes large enough to sustain a commercial endeavour.”
Dennison said that the new Petroleum and Prospecting Licence, which is accompanied by a Production Sharing agreement, avails Repsol an area approximately 6,525 sq. km. within Guyana’a sedimentary basin, and approximately 100 miles seawards of the mouth of the Berbice River.
Detailing the operations that are to follow today’s signing, Murillas said that the first phase of their operations include the execution of 2D and 3D seismic acquisition. He explained that the seismic programme will be carried out by boats which will be sent offshore to transmit sound waves. This exercise is expected to be completed by the end of 2013.
The processing of this data will follow, a process which Murillas estimates will take three to four months. After the information would have been properly processed the company will then begin interpreting the information, which is scheduled to be completed by the end of 2014.
With these phases completed, Repsol hopes to identify a suitable drilling location by 2015, and to commence drilling by 2016.
As part of the agreement, the company has committed to contributing to education and the transfer of technology to facilitate capacity building in Guyana in this and related fields. Minister of Natural Resources Robert Persaud expressed his particular excitement as this aspect of the agreement.
The Minister said that Guyana is edging closer to becoming a producer of oil, but noted the country’s limited capacity in this sector. Considering this possibility he said that it is imperative that Guyana acquire the necessary skills to be able to realise and maintain its status as an oil producing nation, once it is achieved. He also stressed the importance of ensuring that Guyanese be employed to a large extent in these ventures.
Repsol, considered among the top international petroleum companies, has been present on the Guyana scene since 1997.
