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Top exploration wells in Guyana, six other territories at risk of being delayed – Rystad Energy
According to Rystad Energy, at least nine of the world’s top planned exploration wells for 2020 are at risk of being suspended as a result of the combined effect on oil and gas activities of the COVID-19 virus and the oil price war between Russia and Saudi Arabia.
Rystad Energy said that these wells, located in Norway, Brazil, the Bahamas, Guyana, the US, Gambia and Namibia would target a combined seven billion barrels of oil equivalents (boe).
The wells that Rystad Energy has identified as candidates for suspension are at risk because of their commercial viability under the current price levels, shutdowns that affect the supplies of equipment components, operators’ prioritization among other targets and limitations in crew movements, among other reasons.
“Given the prevailing global situation, we now foresee that the cumulative discovered volumes by the end of the year could go even below the 2016 level of 8.9 billion boe, which was the decade’s lowest. This will solely depend upon how many key wildcat wells will still see a spinning drill bit in the coming months, as some of them could be either suspended or postponed,” says Rystad Energy senior upstream analyst, Palzor Shenga.
The Rystad official was also keen to note that the first quarter of 2020 already started on a low note, as explorers have only uncovered new volumes of around 2.5 billion boe. Kaieteur News understands that the 22 discoveries are evenly split between onshore and offshore regions, with gas representing just over half of the volumes. Rystad also noted that volumes are down about 40% from the same period of 2019, and the number of discoveries has almost halved.
At the beginning of 2020, Rystad Energy believed that the global discovery trend would continue its upward trajectory with an expected increase in volumes. However, the current global market situation it said will bring many challenges to exploration.
Rystad said that the understanding of the geological context and complexities of the subsurface remains unchanged but stressed at the same time that it is the unexpected market turmoil above the surface that will play the key role in the coming months.
Rystad Energy is an independent energy research and business intelligence company providing data, tools, analytics and consultancy services to the global energy industry. Its products and services cover energy fundamentals and the global and regional upstream, oilfield services and renewable energy industries, tailored to analysts, managers and executives alike.
DISRUPTION
About a week ago, Kaieteur News reported that ExxonMobil has made plans to adjust drilling activities offshore Guyana as a result of travel restrictions that are currently in place. Kaieteur News was able to confirm this with ExxonMobil’s Public Relations and Government Affairs Advisor, Janelle Persaud.
While this decision has been taken, the official noted that ExxonMobil Guyana is working assiduously towards limiting the disruption of the coronavirus to its operations. Persaud added,
“We continue to monitor the COVID-19 situation closely and will adjust operations as necessary with safety and the protection of the environment as priorities.” She, however, declined to provide specifics on the adjustments Exxon said it would be making.
Be that as it may, Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams, was able to disclose that ExxonMobil had planned to drill over 20 wells but the novel Coronavirus has affected the approval process. Adams explained that ExxonMobil had planned to drill wells in three blocks–Stabroek, Kaieteur and Canje. ExxonMobil owns a 45% stake in the Stabroek Block, with Hess Corporation HES holding a 30% interest. The remaining 25% stake at the block is owned by CNOOC Petroleum Guyana Limited, a subsidiary of CNOOC Limited CEO.
In the adjoining Kaieteur Block, located north of Stabroek, operator ExxonMobil owns a 35% interest, partnered by Ratio Energy of Israel and Hess. The 13,500-square kilometer Kaieteur Block’s water depth is in the range of 2,800 -3,800 meters. Moreover, in the 6,021-square kilometer Canje Block located east of Stabroek, ExxonMobil holds a 35% operating stake. It is partnered by Total S.A, JHI Associates, and Mid-Atlantic Oil and Gas.
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