Following the discovery of oil found at two wells offshore Guyana that is low quality and unprofitable, British company Tullow Oil will continue drillings next year with hope of finding better quality of crude.
This was revealed by Head of the Department of Energy, Dr Mark Bynoe, who told reporters on Thursday that he, along with officials from the Guyana Geology and Mines Commission (GGMC), had met with Tullow representatives prior to the issue being made public.
“As we move forward, part of what they will be doing after— they indicated Q2 of next year—would be the further appraisals of these…” Dr Bynoe said.
Last week, Tullow Oil revealed that its two fields in the Orinduik Block off of Guyana’s shore contained oil that is less commercially viable.
The Jethro and Joe discoveries are both said to contain heavy crudes with high Sulphur content – a variety of oil that is less economically viable than the light, sweet crudes found in the US and Saudi Arabia or even by ExxonMobil right offshore Guyana in the neighbouring Stabroek Block.
However, Dr Bynoe pointed out on Thursday that this discovery is not unusual circumstances.
“Most of the finds that are often announced, are announced based on a single well that is drilled. After that, the companies go back in to do appraisal drills. That appraisal drills may then help them to find additional types of fuel. So you can have in the first field, heavy fuel and later on, you can find lighter fuel. It’s not homogenous,” the Energy Director noted.
In the wake of the tests raising questions about the two discoveries, Tullow’s oil shares had plunged by a fifth.
Nevertheless, the company indicated in its trading statement that while the results from the Jethro and Joe wells continue to be evaluated, the petroleum system models are being updated in pursuit of additional prospects and lighter oil in the area.
Tullow holds a 60 per cent stake in the Orinduik Block, while Total E&P Guyana BV has 25 per cent and the remaining 15 per cent being held by Eco (Atlantic) Guyana Inc.
Additionally, Tullow, through its partner Repsol, is currently drilling the Carapa well in the Kanuku Block. The well started at the end of October, with results expected before the year-end.