Oil exploration may go beyond 20 year period

Apr 21, 2017 News

The oil deal signed between the Government of Guyana and ExxonMobil may be extended beyond the initial 20-year period depending on the amount of oil which is discovered through future exploration exercises.

Highlighted in dark blue, the Stabroek Block which ExxonMobil is exploring.

The question was brought up by Minister of Communities Ronald Bulkan, who is Chairman of the Parliamentary Sectoral Committee on Natural Resources. The Committee met on Wednesday to witness presentations by Minister of Natural Resources Raphael Trotman and Minister within the Ministry, Simona Broomes on key areas of concern within the extractive industries.
One of the issues discussed was an update of the oil exploration being done in the Stabroek Block by ExxonMobil, the United States of America based company contracted to conduct oil exploration offshore Guyana.
Following the presentations, Bulkan asked Minister Trotman to clarify whether the 20-year agreement stands to be altered in terms of duration since there are other wells have been found containing oil.
According to Trotman, indeed the timeline of 20 years refers to the Liza field agreement. He said that now the matter is being discussed in another phase, whether it would become a ‘tie in’ agreement.
He said that the Payara well is located 10 miles away from Liza. As such, Trotman said that it would be cheaper to run a 10 mile underground apparatus or structure than to install a second independent infrastructure just for that second well.
“Economies of scale might be better if you have infrastructure linking to the existing infrastructure at Liza. It would be far less rather than to set up a whole independent apparatus for a second well.”
Further, he said that the Snoek well is within a 10- and 12-mile radius. He said that the discussion now is whether these two wells should be tied into the apparatus that is going to exist for the Liza well.
He told Bulkan that he was correct in that the 20-year cycle was before the two subsequent discoveries of Payara and Snoek. The Stena Carron drillship started drilling Snoek, its fourth well, on February 22, last on the Stabroek block offshore Guyana. The well is located about six miles to the south-east of ExxonMobil’s Liza discovery.
ExxonMobil began its exploration in 2015 and first discovered the Liza-1 which was followed by the Liza-2 well. According to the company, both wells combined have a potential recoverable resource of 800 million to 1.4 billion barrels of oil equivalent.
Following this, the company discovered the Payara-1 well approximately 10 miles northwest of the Liza-1 discovery and encountered more than 95 feet of high-quality, oil bearing sandstone reservoirs. The Stena Carron arrived at Snoek after completing a drill stem test at Payara. The Payara-1 probe was drilled to a total depth of 5,512 metres late last year and hit 95 feet of net pay.