Latest update November 27th, 2024 12:03 AM
Exxon did not return 45% of Kaieteur Block since 2022
Kaieteur News – ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) is yet to return 45 percent of the Kaieteur Block, said to be one of the most highly prospective blocks in ultra-deep waters offshore Guyana.
The agreement for the block spanning 3.3 million acres was signed in April 2015 between Guyanese authorities and EEPGL which leads a consortium consisting of Hess Corporation, Ratio Energy Ltd. and Cataleya Energy Ltd. Though signed off at that time, Exxon and its partners were only allowed to conduct any works pertaining to the block in 2017. This approval was granted on the condition that only 40 percent of the block can be explored to steer clear of aggressive tactics from Venezuela.
According to the agreement, Exxon and partners were required to conduct seismic surveys during a period of four years. Seismic surveys are considered critical since the process utilizes technologies that produce detailed images of the layers of rock and structures beneath the Earth’s surface. These images help geologists and geophysicists locate and estimate the size of underground oil and gas reserves.
Within the first 24 months of being allowed to work on the block, Exxon was expected to acquire all available 2D seismic data from previous surveys conducted over the contract area, process and/or reprocess as necessary and interpret same. At the end of the first two years, bringing it to 2019, Exxon was required to “relinquish 25 percent of the contract area and commit to work programme in phase two.” This never happened.
A map showing the location of the Kaieteur Block offshore Guyana
In the next 24 months that would follow 2019 to 2021, Exxon was required to conduct a survey to acquire a minimum of 1000 line kilometers of new marine 2D seismic and/or five hundred square kilometers of new 3D seismic over the area and interpret same. Following this, it was required to relinquish 20 percent of the block or the entire contract area.
As a result of the COVID-19 pandemic which had hit these shores in March 2020, Exxon had approached regulators for a one-year extension, thereby taking its period of relinquishment to 2022.
Kaieteur News recently reached out to ExxonMobil Guyana’s Media and Communications Supervisor, Meghan Macdonald, who confirmed that no portions of the block have been relinquished yet.
Importantly, Exxon is supposed to seek government’s approval to renew the prospecting licence for the block. This should have occurred at the end of the four-year period, last year. With government’s blessings it would get to keep the block for a period of three years. Neither government nor Exxon have said whether that renewal was applied for or granted.
If such an application were to be approved, Exxon would have up to 2025 to drill one well, before having to relinquish 20 percent of the block, or if it so wishes, the entire contract area.
After 2025, it would have one final opportunity to seek government’s approval to conduct further works. This could only be for a maximum of three years. If approved, it would have to drill two more exploration wells before relinquishing the remainder of the block in 2028, excluding those parts where commercial discoveries have been made.
Since taking over as operator of the block, Exxon drilled one well in August 2020 called Tanager which did not yield oil in commercial quantities. Tanager was drilled to a total depth of 8,000 metres making it the deepest well ever drilled by ExxonMobil offshore Guyana.
The Kaieteur Block, which spans 13,500 km2 is larger than the size of Jamaica (10,991 km²) and Trinidad and Tobago (5,131 km²). It holds a gross, estimated prospective resource of 2.1 billion barrels of crude.
Exxon is the operator with a 35 percent working interest while Ratio Energy and Cataleya Energy hold 22.5 percent each. The remaining 20 percent interest in the block is held by Hess.
- Cataleya Energy Ltd., Esso Exploration and Production Guyana Limited (EEPGL), Hess Corporation, Ratio Energy Ltd., subsidiary
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