Spanish oil company asks again for more time
Spanish oil company Repsol has asked for more time to do exploratory work on its Kanuku block offshore Guyana before drilling, the Ministry of the Presidency announced yesterday.
This is likely to push any drilling past a mid-May commitment date next year. In June last year, the company had asked government for an additional six months before making a decision on drilling. Originally, the company was required to commit to drilling or relinquish exploratory rights by the middle of November, 2015.
A six-month extension would have given the firm up to May this year to make a decision on drilling, just one year before the projected drill date, which was set at the middle of May 2017.
In a statement, the Ministry of the Presidency said Repsol officials met yesterday with President David Granger to seek an extension to continue exploratory work in the Kanuku Block.
It reported that in a brief comment after the engagement, Repsol’s Latin America Exploration Director Mikel Erquiaga explained that the company has to drill a well, but had been delayed by several stumbling blocks, including its legal battle with CGX Energy Incorporated in 2012 over exploration activities in the Georgetown Block. This matter was resolved 2014.
“We want a short extension in order to continue working in the Block and eventually drill a well,” Erquiaga was quoted as saying. The statement did not say whether the extension was approved or the length of the extension requested.
In 2012, Repsol, which is based in Spain, served as the operator for the consortium of companies, which also included YPF Guyana Limited, Tullow Guyana BV and CGX Resources Inc., which drilled the Jaguar-1 well. The operation discovered the presence of hydrocarbons but the well was abandoned after the company encountered very high pressures at intervals above target depth.
Though that drill site did not produce oil in economic quantities, Repsol was able to gather significant seismic data that will be useful for future exploratory work. Both government and Repsol have maintained that the results of the drilling carried out at Jaguar-1 were “encouraging.”
Following the termination of drilling on the Georgetown Block, Repsol allowed the Georgetown Petroleum Prospecting Licence (PPL) to expire and sought out a new PPL covering virtually the identical acreage offshore in Guyana, now known as the Kanuku PPL.
On May 14, 2013, the Government of Guyana signed an agreement for petroleum exploration and production with Repsol which said that it hoped to begin drilling for oil in the ‘ Kanuku Block’ off the Berbice River by 2016. The PPL, which was accompanied by a Production Sharing agreement, availed Repsol an area approximately 6,525 sq. km. within Guyana’s sedimentary basin, and approximately 100 miles seawards of the mouth of the Berbice River.
Repsol has been present on the Guyana scene since 1997. There has been heightened interest in oil exploration offshore Guyana particularly after the announcement in May last year by US oil company ExxonMobil Corporation that reported a “significant oil discovery” at its Liza-1 well offshore Guyana.