Where is the oil?
Way back in 2000, the US Geological Survey announced that Guyana had a 95% chance of having at least 454 fields with a minimum of 1 million barrels of oil each. With the same probability, we had at least 1139 gas fields with some 6 billion cubic feet of gas. This was not theory, but was based on data gathered by satellites that analysed the structure of our offshore geological structures.
But even the theory predicted that we should have petroleum off our shores. Tullow Oil was a new aggressive oil exploration company that discovered the huge billion-barrel Jubilee Oil Field off the coast of Ghana in West Africa. Going by the long-held theory that West Africa had once been joined to the northern coast of South America (now occupied by the Guianas), Tullow Oil put its money where its mouth was and began drilling off French Guiana. It struck black gold last year with another billion-barrel field. In June, it tested the theory back in West Africa, this time off the Ivory Coast and last month was successful once again.
Our exploration saga started off the Corentyne coast in 2000 by CGX, a newly-formed Canadian company. Unfortunately, its oil rig was forced to leave the area in short order by Suriname gunboats after that country claimed the company was operating in its territorial waters. Suriname had been pumping oil for some time off its coast. We were the last of the Guianas not to have struck oil.
Lucky for us, Suriname agreed to arbitration and the U.N. arbitration tribunal ruled in 2007 that the area belonged to Guyana. After striking a few dry wells following the award, earlier this year, CGX teamed up with Tullow Oil hoping for better luck – in addition to the better financing, of course. Sadly, their Jaguar well had to be abandoned “after reaching a point in the well where the pressure design limits for safe operations prevented further drilling to the main objective.”
The field off French Guiana has a depth similar to Brazil’s pre-salt oilfields, where drilling exploration ranges from 6,758 feet at the ocean’s floor to about 19,500 feet, and this is probably the range for our oil. However, while not reaching its target depth, Tullow said early drilling had yielded some signs of light oil.
But following BP’s disastrous Deepwater Horizon blowout and oil spill in the Gulf of Mexico in 2010, there is now a new hurdle to overcome – environmental concerns. The French government had briefly suspended drilling offshore nearby French Guiana, due after the newly appointed French environment minister, Nicole Bricq, announced that the Shell (to which Tullow had sold the exploitation rights) project “insufficiently … took into account environmental problems”.
The environmental minister was quickly removed, but at the just concluded World Conservation Congress in Jeju, South Korea, the World Wildlife Federation (WWF) France moved a motion to have drilling stopped off the shores of Guyana, Suriname and French Guiana. The motion cites the potential for oil drilling to have disastrous consequences for the environment.
While our Minister for Natural Resources has assured all and sundry that we will proceed with our exploration drive under the proper environment safeguards, the environmental movement will ensure that those safeguards add substantially to the cost of drilling and exploitation of the oil off our coast. The caution exercised by Tullow, CGX and their partners in abandoning their Jaguar well, demonstrates that such concerns are not unfounded.
In the meantime, the government has awarded exploration rights to another innovative US oil drilling company – Andarko. But matters have also heated up in the west, where it had long been thought that our oil was located. Opposition elements in Venezuela have raised concerns that Exxon and Shell have began exploring the offshore block called Stabroek in the Essequibo region, for which the two companies have “an active exploration license”. Essequibo, of course, is being claimed by reactionaries in Venezuela.
If we ever strike oil, it looks as if it will be very hot.