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EEPGL scouring Kiru Kiru-1 Well for more oil
By Davina Bagot
Kaieteur News – ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) is currently hunting for more oil in the Kiru Kiru-1 Well, located in the Stabroek Block of Guyana’s Exclusive Economic Zone.
Exxon’s PRO, Janelle Persaud
In a notice published in Tuesday’s edition of the Kaieteur News, the Maritime Administration Department (MARAD) said that the exploration activity commenced on March 14, 2022.
The regulator body also explained that the MODU Stena Drill Max will be engaged in the drilling activities which will conclude on July 30, 2022.
In addition to this, some 25 vessels will be used during the operation. These are Gary Rook, Russel Bouziga, Robert Adams, Seacor Congo, Sanibel Island, Jack Edwards, Holiday, C-Installer, Kirk Chouest, Roger White, Charlie Commeaux, Ted Smith, Paradise Island, Seacor Demerara, Clarence Triche, Island Performer, Horn Island, Russell Adams, Seacor Murray, Seacor Amazon, Seacor Mixteca, Emily Day McCall, Michael Crombie McCall, Guyana Hero and Seacor Tarahumara.
This publication understands that the well site is situated some 115.297 nautical miles or 213 kilometres from the Coast of Guyana, and covers an area of 0.29 nautical miles or 1 square kilometre.
All mariners are required to stay clear of these vessels and navigate with extreme caution when in the vicinity, MARAD noted.
Exxon’s Public Relations Officer, Janelle Persaud, briefly explained on Tuesday that the operator is also conducting drilling activities in other Wells of the Stabroek Block. These include Patwa, Lukanani and Barrel Eye.
At the beginning of this year, Exxon added two more discoveries to the 10 billion barrels of oil already found in Guyana. Both discoveries, the Fangtooth-1 and Lau Lau-1 Well are located in the Stabroek Block.
Guyana in 2016 inked a Production Sharing Agreement with Esso Exploration and Production Guyana Limited (EEPGL) and their partners Hess Guyana Corporation and China National Offshore Oil Company. Under that agreement, the operator EEPGL—commonly referred to as ExxonMobil Guyana—is allowed to recover up to 100 percent of its exploration and other costs by deducting proceeds up to 75 percent of the cost oil from the Stabroek Block.
This, therefore, means that the country is paying the US oil giant to scour for oil and must pay even if the search is in vain.
The matter of bills being paid in relation to exploration and other expenses out of cost oil was flagged by the International watchdog body—the Natural Resources Governance Institute (NRGI)—as an area for which Guyana must pay keen attention given the prevalence of corruption found in contracts between suppliers and International Oil Companies.
In fact, NRGI research and analysis conducted on this matter, “found that 64 percent of petroleum projects reviewed in over 40 countries was over budget due to incidents of corruption.”
One area that saw such high cost overruns was exploration costs, said NRGI.
To this end, the international body has since pointed out that exploration costs for Guyana pre-2020 are estimated to be US$4.58B based on estimates provided by Rystad Energy, a Norwegian Consultancy.
Given what it has observed from its research, NRGI, which is headquartered in the USA, advised that Guyana should check these costs, which were racked up with suppliers to ensure they are correct.
According to Exxon’s schedule of exploration activities for the Stabroek Block, the company is currently engaged in an aggressive 25-well exploration campaign that started back in June of last year. That drilling campaign is expected to last until the end of 2025.
Additionally, the US oil major is also gearing for two 12-well campaigns in the Canje and Kaieteur Blocks. Those permits are presently pending at the Environmental Protection Agency (EPA).
During the recently concluded International Energy Conference and Expo, ExxonMobil Chairman and Chief Executive Officer (CEO), Darren Woods, lauded the unprecedented achievements in Guyana.
With this in mind, he told conference delegates that the oil company was still to explore in a significant portion of its concessions that could lead to further discoveries beyond the more than 10 billion barrels of oil equivalent that would mean future development opportunities.
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