Jan 17, 2020 News
… Guyana waited years
Suriname recently announced that Apache and Total, two oil companies operating off its shores, made a hydrocarbon discovery on an oil concession, titled Block 58.
In its Maka Central-1 well, Apache announced that it confirmed a geologic model with 73 meters (240 feet) of oil pay and 50 meters (164 feet) of light oil and gas condensate pay.
Just days after that discovery, Energy Consultancy firm, Wood Mackenzie, was able to publish a report, disaggregating the oil and gas contents of that find.
In its report, Wood Mackenzie said that the discovery is estimated to contain 300 million barrels of oil, 150 million barrels of condensate and 1.4 trillion cubic feet of gas.
To the general Guyanese public, the estimation of the contents of a find so quickly after it was made is unheard of. This is because it took five years for it to find out the natural gas content in ExxonMobil’s first discovery made in 2015.
It was only on Kaieteur Radio’s show, Guyana’s Oil & You, last Thursday that Minister of Public Infrastructure David Patterson informed the public that the Liza-1 field is estimated to contain one trillion cubic feet of natural gas. The Government is also aware of the gas content in Liza-2.
For years, when discoveries are made, the company has only publicly reported its discoveries in barrels of oil equivalent (boe), which includes but does not disaggregate oil and gas contents.
Up to late 2019, Kaieteur News questioned ExxonMobil several times about the gas content in its discoveries, and it was repeatedly told that ExxonMobil was still analysing the contents of the finds.
Meanwhile, its local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), had informed the Inter-American Development Bank (IDB) that between 30 and 50 million cubic feet per day of Natural Gas (NG) can be made available for electricity generation in Guyana from the Liza-1 project.
Like Wood Mackenzie, a local firm could analyse the contents of ExxonMobil’s finds using its well logs. Kaieteur News was informed by Petroleum Engineer Paul Ramsaywack that the contents are estimated based on a standard equation that takes into account porosity and fluid properties, all data listed in the logs.
SURINAME SECURES BETTER FISCAL TERMS
Suriname is not only lucky to benefit from more public disclosures and transparency than the Guyanese public. It has also benefitted from a royalty rate that is more than three times that of Guyana. While Guyana’s royalty for the lucrative Stabroek Block agreement is a meager two percent, the Suriname Government will receive a royalty of 6.25 percent of the oil produced on the Block 58.
Kaieteur News also understands that the companies will pay Suriname a 36 percent tax on income. In Guyana’s case, ExxonMobil and its partners have been given a range of tax waivers. Guyana will also be giving tax certificates to ExxonMobil so that it would also be exempted from taxes in its home country.
AUBREY NORTON FRIGHTEN RENEGOTIATION AND RING-FENCING
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