Still nothing…second well abandoned amidst safety fears
- but Repsol said that oil found
The country’s second attempt to drill for oil offshore has ended prematurely with CGX Energy Inc, a partner in the consortium, announcing yesterday that technicians were forced to plug the Jaguar-1 well amidst safety fears.
The news came almost two months after CGX had announced failing to find oil in commercial quantities…dashing the country’s hopes, at least temporarily, of cashing in on the black gold.
The partners to the Georgetown PPL in which the Jaguar-1 was being drilled are Repsol Exploración S.A (15%), as operator, along with YPF Guyana Limited (30%), Tullow Oil plc (30%) and CGX Resources Inc. (25%).
According to the statement from CGX Energy Inc. yesterday, drilling operations at the Jaguar-1 well have ended and the well will be plugged at a depth of 4,876 metres without reaching the primary objective in the Late Cretaceous geologic zone.
“The decision to stop drilling at this point was unanimously agreed by all partners based on safety criteria and was taken after reaching a point in the well where the pressure design limits for safe operations prevented further drilling to the main objective. Jaguar-1 was a high pressure, high temperature (HPHT) well which was spudded in February 2012 using the Atwood Beacon jack-up rig.”
CGX said that while the primary Late Cretaceous objective was not reached, samples of light oil were successfully recovered from two Late Cretaceous turbidite sands.
But the consortium is not giving up hope that there is oil in commercial quantities in the same area.
According to Kerry Sully, CGX President and CEO, “Based on hydrocarbons recovered during the drilling of Jaguar-1, CGX is confident that a new well targeting the same prospect would hold significant promise and is therefore committed to seek a re-drill utilizing a new well design.”
Commenting on the company’s plans in the Guyana Suriname basin, Dr Suresh Narine, Chairman, reiterated CGX’s near-term goals stating that “in addition to our commitment well on the Corentyne Block, we are planning a 3D seismic programme later this fall with our ultimate goal being to commit to a rig for a three to five well program. Added to this would be the re-drill of the Late Cretaceous target addressed by the Jaguar-1 well.”
According to the Ministry of Natural Resources and the Environment yesterday, the decision to bring the drilling operations at the Jaguar-1 well to a close was communicated to Minister Robert Persaud on Sunday.
The Jaguar-1 well was targeted to be drilled to 6,541 meters with actual drilling commencing on February 7 with the Atwood Beacon Drill Rig.
The Ministry explained that the drilling of the well was estimated to be completed in approximately six months and progress was “steady”.
“However, down-hole conditions became very challenging and despite the resort to technical and engineering solutions by the consortium, Government accepts the consortium’s decision to close operations, safety being the primary consideration.”
The Guyana Geology and Mines Commission is preparing work with the parties on a full analysis and determinations from information gathered so far.
“But evidence of petroleum occurrences was encountered, which were encouraging to all the parties. Government and operator for the consortium Repsol, continue to be engaged on the way forward, which could include a second well to achieve the intended objective of the Jaguar-1. These discussions have started as it is our intention to see an early restart of early exploration drilling by all the approved parties.”
CGX’s share plunged by over 40 per cent yesterday following the announcement that the well will be plugged.
CGX reportedly said that it was spending around US$500,000 daily to have Ocean Saratoga rig anchored in the Corentyne concession.