–as Middle-Eastern oil producer looks to invest in Guyana oil sector
Qatar Petroleum, the national oil and gas company of the Middle Eastern oil producer, is looking to get in on the action in Guyana’s oil blocks by partnering with another foreign company. They will, however, have to go through the Department of Energy first.
Qatar, with oil reserves of over 20 billion barrels and an advanced economy, is no stranger to the oil sector. In fact, the Middle Eastern State was until January a longstanding member of the Organisation of Petroleum Exporting Countries (OPEC) and is known as one of the world’s top oil producers.
It was announced that Qatar Petroleum entered into an agreement with French company Total for a share in the exploration and production of its blocks. Total will be selling Qatar Petroleum 40 per cent of its existing interests in the Orinduik and Kanuku blocks.
During a press conference on Monday, Department of Energy Head Dr Mark Bynoe confirmed that the deal was being reviewed. However, he confessed that the deal is “substantially unclear” for the Department.
“We have received a transaction letter from Total, which the Government is currently studying. But until such a time as we understand the implications, because this is not a normal farm in, we’re not about to pronounce thereon.”
“Because what we’re finding here is Qatar Petroleum seeking to back into the Total Guyana agreement. But we can’t go further than that because it is still early days. We are still in discussion with them, so we can have greater clarity. At this point in time, it is still substantially unclear for us.”
Oil has often been cited as having transformed Qatar’s economy, making it a country with one of the best standards of living per capita in the world
According to an independent competent persons’ report, the Orinduik block could have 4 billion oil-equivalent barrels. Drilling using the Stena Forth drillship started on the Jethro-Lobe wells in this block earlier this month. Tullow is expected to drill about 82 nautical miles from the coast of Guyana and cover an area of 848 square kilometres.
On the other hand, drilling in Kanuku is expected to start this year, with Tullow planning to drill a well called the Carapa 1. Total has a 25 per cent participating interest in both blocks, which it shares with other operators like Tullow, Eco and Repsol.
Tullow had in February announced that it was bringing forward its drilling programme from the previously scheduled end of the year to the second quarter. Besides Carapa, plans have been announced to drill two wells here namely the Jethro-Lobe and Joe.
Its Carapa prospect in Kanuku is expected to be drilled in the third quarter of 2019. It is understood that the net cost of the Jethro well is US$30 million, while the Carapa well will cost US$20 million.
Tullow’s partner in the Orinduik Block, Eco Atlantic, had announced that drilling on the Joe prospect will begin in mid-July of this year. They had announced that the Stena Forth drillship will move directly to the Joe after it finishes drilling the Jethro Lobe Well in the Orinduik Block.
It is understood that the Joe is located in approximately 650 metres of water and will cost Eco approximately US$3 million to drill. A recently published report from international company Gustavson Associates has estimated that the well has a 43.2 per cent chance of success.
The Orinduik oil block is just a few kilometres from Exxon’s discoveries in the Liza and Payara fields. It is under the administration of Eco Guyana and Tullow, who signed a 10-year Petroleum Prospecting license and Production Sharing Agreement with Guyana in 2016.
Total E and P Activities Petrolieres entered the fray in 2017, partnering with Eco with the option to get a 25 per cent share in the block.