Exxon yields favourable results from new well, sources say
– announcement expected soon
Preliminary findings from the Snoek-1 well, ExxonMobil’s latest exploration in the Stabroek Block offshore Guyana, are favourable and the company is expected to make a formal announcement within the coming weeks, sources say.
Natural Resource Minister Raphael Trotman yesterday told Cabinet that the US oil giant “could make another significant announcement on its work in Guyana Economic Zone (EEZ) within the next two weeks,” according to a Ministry of the Presidency statement.
Trotman’s statement to Cabinet was made following a presentation by the newly appointed Presidential Advisor on Petroleum, Dr Jan Mangal, on the future of the oil and gas sector and the actions that must be taken to prepare Guyana to manage the sector.
According to the ministry, Trotman said that Mangal’s appointment could not have been timelier as Exxon “has been aggressively carrying out seismic and exploratory work, with an announcement expected in another week or two.” This, he said, will help the Cabinet to act more definitively on matters in relation to this sector.
Stabroek News was reliably informed that while the Snoek exploration was “still ongoing and it is very, very early,” preliminary indications are that the well has the potential to yield “similar, if not better” results than the Liza wells.
The Snoek exploration prospect is 6 miles (10 km) south of Liza-1.
Sources said the company still has to go through the process of analysing its encounter logs but will “definitely be carrying through” with the Snoek project. The company is continuing “further evaluations,” this newspaper was told.
Fresh from its recent discovery of oil in its Payara well, ExxonMobil early last month announced its drilling of Snoek.
In a notice from the Maritime Administration Department (MARAD), it was stated that the drilling would have commenced on February 15, 2017. It was later reported by Exxon that the drilling commenced on February 22. The drilling programme is scheduled for six months.
The drill site is approximately 101 nautical miles from the coast of Guyana and covers an area of two square miles.
On May 20, 2015, ExxonMobil announced a huge oil find in the Liza well in the Stabroek Block. Its drill ship encountered more than 295 feet (90 meters) of highquality oil-bearing sandstone reservoirs.
Thereafter, ExxonMobil announced plans for other wells in the Stabroek Block as it was confident that there were more deposits. Several appraisal wells have already been sunk to evaluate the Liza find.
While Exxon’s newest announcement could see additional expectations from stakeholders building even as Guyana prepares for first pumping in 2020, some sources have cautioned against “getting too excited.”
One source noted that a major concern remains that Guyana is not yet prepared in the areas of available infrastructure or skills for production. “One has to be wary of the repercussions of not only such a future announcement but the reporting of it. Guyana is a small country and we are not yet prepared for Liza… I don’t know if we will be by 2020 but we have no choice…so yes we know the company will say favourable things and what’s not, but we also have to be careful how that is reported,” the source said.
“People are watching us, our neighbours are watching us, we have that current controversy with Venezuela, so for sure they are taking note and many other things I can’t say…it is very preliminary but indeed promising,” the source added.
The Ministry of the Presidency said that in an invited comment after his presentation to the Cabinet, Dr Mangal said that given the fact that he is new to the position, it was important for him to outline his plans in the context of the president’s vision for the development of the sector. “It is to give Cabinet some comfort around the role itself, my experience and then also the vision of the president and the high level vision, which we will have to work on and Guyanese will have to work on. But it was really to give Cabinet a view of where we are starting for Guyana,” he said.
Mangal explained that as the Advisor to the President on Petroleum, he will be tasked with being the “middle ground” between the government and stakeholders to ensure that the necessary plans
and policies are put in place. “It is around bringing oil and gas expertise, someone from the industry like myself, in the position in the Ministry of the Presidency, who can speak to all stakeholders in Government and outside of Government. It is a position in the Ministry that can look at things holistically in terms of Guyana’s energy sector; how oil and gas will affect Guyana as a whole. It is about how it will touch all areas of Guyana, business and all social issues. The role will touch on all areas and will try to stimulate the stakeholders input and I expect that it will grow over time,” he said.
Dr Mangal, whose appointment is funded through the InterAmerican Development Bank (IDB), noted that while his initial role is intended to last for a six-month period, there is an intention to seek funding for the appointment to be extended and expanded to include other experts from the technical, legal and commercial areas of the oil and gas sector.
“I envision a small team in the ministry, about five or less and this is a team of experts from the industry and they will be there to assist the Ministry of Natural Resources and the Ministry of Finance and to also work with the Ministry of Foreign Affairs and the Ministry of Public Infrastructure. So under that five, there will be a commercial oil and gas expert, an oil and gas lawyer, an analyst and possibly a technical person but these will be persons who have been in the industry for a very long time, who know the industry very well and who are prepared to come and advise the Government of Guyana,” he said.
According to the ministry, Mangal is an expert in offshore and civil engineering, who has a Doctorate in Offshore Geotechnical Engineering from the University of Oxford and a Bachelor’s Degree in Civil Engineering from the University of Edinburgh. He has worked in the marine and oil and gas industries for the past 18 years.