Canadian-based oil company Eco (Atlantic) Oil & Gas Limited, which at one point held just 15 per cent shares in the Orinduik block, is set to become the majority owner of the block and is eyeing the start of exploration drilling in the Orinduik block come 2025.
Back in August 2023, the People’s Progressive Party/Civic (PPP/C) Government had decided to approve the sale of London-based Tullow Oil’s 60 per cent majority stake in the Orinduik Block to Eco Atlantic Oil and Gas.
According to Eco in a recent investor briefing, the company has since acquired this 60 per cent of Tullow via a deal in August and the company is expected to acquire 75 per cent working interest and operatorship of the block by this year’s end. They will operate the block alongside Total Energies/Qatar Energy Joint Venture, who together hold 25 per cent.
In that investor briefing, Eco also lays out a timeline for achieving certain milestones in both its Orinduik and Canje blocks, the latter of which it holds indirect shares in. In the case of Orinduik, the company expects to make a decision on entering its next stage of exploration in the first quarter of 2024.
What will follow is a year of the company making preparations to drill its first exploration well in the Orinduik block as operator. According to Eco, it is targeting either the first or second quarter of 2025 to drill that well.
The Orinduik oil block is just a few kilometres from ExxonMobil’s discoveries in the Liza and Payara fields in the oil-rich Stabroek Block. Back in 2019, when the British company still had control of Orinduik, Tullow had drilled two exploration wells – Jethro-1 and Joe-1 – on the Orinduik licence, which yielded uncommercial oil discoveries.
Nevertheless, Tullow had recognized the material oil resource potential remaining in the Orinduik licence, and as such, the terms of the sale transaction with its Block partner will allow the British company to retain exposure to any potential future success in the region.
Based on the transaction summary, Eco will have to pay Tullow US$4 million if it makes a commercial discovery and another US$10 million if Guyana issues a production licence, as well as royalty payments on future production.
With the acquisition of Tullow’s 60 per cent interest, Eco will now add to its existing 15 per cent working interest – making it the leading operator on the Orinduik licence with a now whopping 75 per cent interest. The remaining 25 per cent working interest is shared by a joint venture between Qatar Petroleum and Total E&P Guyana BV (TOQAP).
In terms of the Canje block, the company explained in its investors’ briefing that an analysis of the reservoir is still ongoing. It was further explained that well targets for 2024/2025 will be defined and work on those targets is expected to start by the second quarter of 2025.
Currently, a 12-well drill campaign is planned for the Canje block. ExxonMobil has already submitted a Cumulative Impact Assessment (CIA) and Environmental Impact Statement (EIS) for this project.
The Joint Venture partners, who include Operator ExxonMobil, Total, JHI Associates, Incorporated and Mid-Atlantic Oil & Gas Incorporated, are aiming to start the project in the second quarter of 2024
Based on previous information put out by Westmount Energy, an indirect partner in the block, the Canje Block could hold as much as 10 billion barrels of oil in total. ExxonMobil, the operator, had previously drilled the Jabillo-1 well in the Canje Block offshore Guyana almost simultaneously with its other wells.