Despite having oil sector experience, Kaieteur owners were not qualified to develop block

Oct 29, 2020 News

The Fleecing of Guyana series…

Kaieteur News – The two initial owners of the Kaieteur Block, Ratio Energy Limited (renamed Cataleya Energy) and Ratio Guyana (owned by Ratio Petroleum) were not qualified to develop the ultra deepwater Kaieteur Block. They flipped the block to ExxonMobil, a more capable company, in March 2017 without doing any work.
The two directors of Cataleya are the Canadian, Michael Cawood and Guyanese, Ryan Perreira. Neither of them had any experience in oil and gas prior to receiving the block.
As for Ratio Guyana, the other initial owner of the Kaieteur Block, its parent company is the Israeli company, Ratio Petroleum. This company has nearly three decades of experience in the industry. However, it does not have the capacity to conduct ultra-deepwater drilling, which is required for the Kaieteur acreage.
Only a handful of oil companies have the capacity to drill in ultra deepwater, including ExxonMobil, Royal Dutch Shell, Chevron, BP, and Total SE. Ultra deepwater has been closed to drilling for decades because companies just didn’t have the technology and the experience. Besides, there was a lot more oil and gas accessible in shallower waters.
Shallow water drilling occurs when the target for exploration is less than 1000 feet deep, while Midwater is generally from 1000 feet to 5000 feet, and Deepwater is considered to be between 5000 feet and 7000 feet.
Before, the categories were much more conservative and considered shallower depths. But as experience grew among oil companies, and technology evolved, companies like ExxonMobil began to push the limits of Deepwater drilling. Ultra Deep-water drilling goes beyond 7000 feet.
Guyana’s Kaieteur Block (of 3.3 million acres) requires such specialised capacity and technology that Tanager-1, the well currently being drilled there by ExxonMobil, is the deepest well the oil major has drilled offshore Guyana. According to a report conducted by the Netherland, Sewell and Associates Inc. firm, the Tanager-1 well, with target depths of 8000 feet, is estimated to hold 256.2 million barrels of prospective resource.
Anti-corruption advocates like the Natural Resource Governance Institute (NRGI) have questioned, in the cases of blocks being flipped this way, why the licence wasn’t awarded to the final, qualified company in the first place. If Guyana had waited and studied the Kaieteur Block area, it would have found information as ExxonMobil did in its seismic survey, which would have informed the handing of the award to a competent company, among other benefits.
The award, made by former President Donald Ramotar, and advised by former Minister of Natural Resources, Robert Persaud, carries red flags which warrant independent investigation.
Read tomorrow’s article in this series, to find out what Guyana forfeited in its handling of the Kaieteur Block licence…

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