Tullow Oil eyes 500 million barrels offshore Suriname

Africa-focused Tullow Oil is stepping up its plans offshore South America after divesting interests in its Norwegian assets and exiting other areas. The London-based E&P, which operates the TEN fields and its flagship Jubilee Field offshore Ghana, said it plans to drill the Araku prospect offshore Suriname, the smallest country in South America, in second-half 2017. “This prospect is a large structural trap which has a resource potential estimated at over 500 MMbo [million barrels of oil],” the company said February 8 in its 2016 fullyear results. “It has been significantly de-risked by a 3-D seismic survey carried out in 2015, which identified geophysical characteristics that are consistent with potential oil or gas effects in the target reservoirs.” Tullow is among the oil and gas companies that have kept some new frontiers in their exploration schemes, despite unfavorable market conditions that caused many to slow exploration spending. In 2016, Tullow halted frontier exploration efforts in Ethiopia, French Guiana, Greenland, Guinea, Madagascar and Norway. With more than 25 exploration wells drilled offshore, Suriname has been described by state oil company Staatsolie as “virtually underexplored.” Commercial production has only come from onshore fields, which together produce about 17,000 barrels per day (bbl/d) of oil. Tullow has interests in two licenses offshore Suriname covering a total of 10,849 sq km (4,189 sq miles). These include Block 54, where the Araku prospect is located, and the nearby Block 47. A rig is currently being sourced for the Aruka well and it is expected to cost USD 14 million net to drill. A drop core survey spanning the blocks was completed last year. Citing a 2012 U.S. Geological Survey report, Staatsolie said the GuyanaSuriname Basin has an estimated resource potential of 13.6 Bbbl, placing it among the world’s largest basins in terms of prospectivity. Tullow reported an operating loss of USD 754.7 million for 2016, down 31% from 2015’s loss of USD 1.09 billion. The company’s exploration write-offs totaled USD 723 million in 2016. “2016 is likely to mark the low tide point for Tullow, with production set to increase in 2017 into a rising oil price environment,” Mirabaud Securities analysts said in a Reuters article. (epmag)