By Leonard Gildarie
Hopes are running high as Guyana’s search for oil took a major step forward
with an announcement yesterday that drilling has started in the Jaguar-1 well, located 107 miles offshore of Georgetown.
The Atwood Beacon, a jack-up rig, is in place and drilling is fully underway, officials said yesterday.
This development is occurring almost 12 years after Suriname ejected a CGX rig from waters that the neighbouring country claimed belonged to them, temporarily dashing the hopes of Guyana.
The Jaguar-1, located in the Georgetown Petroleum Prospecting License (“PPL”) is 25% owned by CGX Resources Inc. with the partners being Spanish-based Repsol Exploracion S.A (15%), as operator, along with YPF Guyana Limited (30%) and Tullow Oil plc (30%).
Drilling started since Tuesday, said officials from government, Repsol and CGX yesterday.
However, Guyana will have to wait for another six months or so to know whether oil in commercial quantities has been found in that concession which is over 3,700 square kilometers.
In another week or so, another rig is expected to start drilling in the Corentyne concession that is 100% controlled by CGX. The Ocean Saratoga, the semi-submersible rig, is already on site there in preparation for the start of drilling. It is expected that results could come within three months for that well.
According to a CGX statement yesterday, the Jaguar-1 well off Georgetown will be drilled to a depth of 6,500 metres (around 21,000 feet) to test the Turonian geologic zone. The well is being drilled by the Atwood Beacon jack-up drilling rig operated by Atwood Oceanics Inc.
According to Stephen Hermeston, CGX’s President and CEO, “The spud of the Jaguar-1 well officially commences the long awaited resumption of offshore exploration drilling for the Government and People of Guyana, the Georgetown Joint Venture Partners and CGX shareholders. The Jaguar-1 well will be the deepest well drilled to date in the Guyana/Suriname Basin. The well is targeting the Turonian
geologic zone, a prolific producing zone offshore West Africa and Brazil.”
CGX Energy is a Canadian-based oil and gas exploration company focused on the exploration of oil in the Guyana-Suriname Basin, an area that is ranked second in the world for oil and gas prospectivity by the United States Geological Service. Estimates of mean recoverable oil reserves are around over 15 billion barrels and gas reserves of 42 trillion cubic feet.
According to Minister of Natural Resources and the Environment, Robert Persaud, all activities for the drilling of the Jaguar-1 well are going according to plan. “This is a deep well and it will take about six months to get to the target area,” the Minister said during a press conference at his office on Shiv Chanderpaul Drive. Also at the press conference were CGX’s Chief Operating Officer, Michael Stockinger; Tarachandra Khelawan, Administrative Manager; Repsol’s Country Manager, Giancarlo Ariza, and Head of the Guyana Geology Mines Commission (GGMC’s) Petroleum Division, Newell Dennison.
Access to the Jaguar-1 well will take about an hour’s flight or 12 hours by boat.
But the drilling for oil is not without challenges. To ensure that the rigs in place meet safety requirements and other regulatory needs, stakeholders have been summoned to a workshop to familiarize themselves.
Safety was also a main concern raised by President Donald Ramotar during a recent meeting with the oil companies.
“We have placed a lot of emphasis and high premium on the issue of safety…” Persaud said in response to questions. “We have been assured by our technical staff and different agencies that there is a robust plan… learning also from the experiences that we would have had in recent times.”
The Minister was in all likelihood referring to a number of high profile oil spillages in other countries.
Regarding what happens if oil is found, the Minister noted that the legislations and arrangements are in place to deal with such eventualities.
Regarding the operations on the rigs and financial benefits from Guyana, it was disclosed that a comprehensive logistics plans is in place using boats and airplanes to take supplies to the two rigs.
Already, for the Jaguar-1 well, Repsol and its partners have spent around US$52M, to rent the Atwood Beacon rig, among other things.
The group expects to spend up to US$180M to drill in the Georgetown concessions.
Guyana has sent local inspectors to Trinidad for training to handle work on the rig.
CGX officials also indicated yesterday that it may cost them around US$55M to drill in the Corentyne area.
But renting the rigs is not cheap. CGX is spending around US$500,000 daily to have Ocean Saratoga anchored in Corentyne concession.
The Atwood Beacon rig is even more expensive, racking up around $650,000 in costs daily.
According to Minister Persaud, the US government will be conducting meetings with critical players on how to manage potential revenues that could be earned by Guyana in case of any oil discovery.
A team from the Commonwealth is also expected in Guyana shortly.
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