Suriname-Guyana basin yet to realise promise
The large discoveries seen in similar geology across the Atlantic in West Africa have yet to be repeated off South America’s northeast coast
Hopes that the Suriname-Guyana basin off the northeast coast of South America could yield similar hydrocarbons finds to those being uncovered in the West African region to which it was once adjacent have lured several major explorers to the basin. Results have been disappointing, but further wells are planned in a region still thought to offer great potential.
Sandwiched between hydrocarbons-rich Venezuela and Brazil, offshore Guyana, Suriname and French Guiana looks highly prospective. A 2012 US Geological Survey report estimated the basin could hold 13.6 billion barrels of undiscovered, technically recoverable oil. For gas, it estimated 21.2 trillion cubic feet. That would make the basin similar in size to some of Brazil’s producing ones.
Shell, Tullow Oil and Total jointly own acreage in French Guiana, which is an overseas department of France. Inpex, Murphy Oil, Tullow, Kosmos, Petronas, Chevron and Apache are all active in Suriname, a former Dutch colony. Meanwhile Shell, ExxonMobil and Canadian junior CGX are among those with stakes in licences in Guyana, a former British colony.
While seismic and other preparatory studies have been carried out across the three countries, drilling activity has been mainly focused on French Guiana.
In 2011, Tullow’s campaign got off to a bright start, when Zaedyus-1, the first well drilled on its licence area, encountered 72 metres of net oil pay in three high-quality reservoir intervals. Tullow estimated that this field could hold 840 million barrels of light and heavy oil.
While Tullow saw its discovery as a strong indication that the basin would mirror finds across the Atlantic West Africa, the drilling programme has yet to build substantially on this find. In December 2012, Tullow said the Zaedyus-2 well had not encountered commercial hydrocarbons and further wells were also disappointing.
In November 2013, Northern Petroleum, a minor partner in the Shell/Tullow/Total acreage, known as the Guyane Maritime Permit, said the final well of a four-well exploration programme in 2012-13 would be plugged and abandoned, having yielded no evidence of hydrocarbons. The partners are now assessing data from the five wells drilled in the licence and the drillship used has left the region. Evaluation is “ongoing”, says Tullow, and Northern Petroleum says drilling has been suspended until 2015.
In neighbouring Suriname, offshore drilling has yet to get under way, but preparations are moving ahead. In January, state oil firm Staatsolie signed its latest exploration deal, a 30-year agreement with Tullow and its partner Statoil, under which they are to invest $35m to gather fresh seismic data and assess the data already collected on Block 54, an 8.5 square km parcel around 200 km offshore.
The production-sharing contract – Suriname’s tenth – allows Staatsolie to take a stake of up to 20%, if the block proves commercial. Petronas completed 3-D seismic on its Block 52 acreage in November.
According to Staatsolie, 25 wells have been drilled in offshore Suriname; none of them producing commercial finds. The country’s next bid round for acreage is due to be announced in mid-2014 with awards scheduled for March 2015, the state oil firm says.
In Guyana, the most northerly of the three countries, three major offshore 2-D and 3-D seismic surveys were carried out in 2013. One of these ended in controversy in October 2013, when a long-standing disagreement over the location of the maritime border between Guyana and Venezuela led to the seizure by the Venezuelan navy of a surveying vessel chartered by Anadarko. Guyana maintained the vessel had been on its side of the maritime border.
In mid-2012, operator Repsol plugged and abandoned the Jaguar-1 well in the Georgetown Block offshore Guyana, due to safety concerns, as high pressure in the well stopped drilling. Repsol had drilled to 4,876 metres subsurface and recovered some light oil – some of the first significant oil samples to be found in offshore Guyana.
Repsol allowed the prospecting licence covering the block to expire, but has since taken out another one of 6,525 square km, known as Kanuku, which covers much of the same acreage. The Spanish firm has a 40% stake, Tullow has 30% and, following a farm-in announced in December 2013, Germany’s RWE Dea has 30%.
The acquisition of 2-D and 3-D seismic data covering 860 line km and around 3,200 square km, respectively, was completed in December, according to RWE Dea, which is also working with Petronas in Suriname. This new data and existing 3-D data are now being analysed. Drilling may begin by the end of 2014. Analysts have suggested the prospect could hold more than 1bn barrels of oil equivalent.
Plans could be complicated by a continuing court battle over the acreage between CGX Energy, which had a 25% stake in the original Georgetown Block, and Repsol. CGX, whose activities are mainly focused on the Suriname-Guyana basin, is contesting the RWE Dea farm-in and is claiming the original license should not have been allowed to expire, as it had wanted to continue exploration on the block, following the abandonment of the Jaguar-1 well.