EVEN after an incredible series of oil finds, Guyana’s oil industry is still ramping up. By the end of October, a third deep-water drillship will be exploring in the the Stabroek Block. Already, drillships in the block have made oil discoveries in an astounding nine out of 11 formations.

The new drillship to enter Guyana’s waters, the Noble Tom Madden, will be headed for the Pluma prospect. The site is 27 kilometres from the 2017 Turbot discovery in the south-eastern corner of the Stabroek Block. This block is licensed to a consortium led by ExxonMobil’s local subsidiary Esso Exploration and Production Guyana Limited.
The plans to add a third drillship to the area were first announced in June after the Longtail discovery. According to Exxon’s press release at the time, “The new vessel will operate in parallel to the Stena Carron to explore the block’s numerous high-value prospects.” According to Noble Corporation’s website, it will remain in Guyana’s waters through at least late December.

This will be the second vessel focused on drilling new exploratory wells, the other being the Stena Carron, which recently drilled successful wells at the Hammerhead and Longtail sites. Meanwhile, the Noble Bob Douglas continues to drill development wells which will produce oil for the Liza Phase 1 project.

Following the Liza 1 discovery, Exxon conducted the largest deep-water seismic study ever done in the Stabroek Block. The data collected was used to build 3-D maps of more than 6,500 square miles of sub-ocean floor geologic formations and identified more than two dozen promising oil prospects.

So far, more than four billion barrels of oil equivalent have since been found and more than a dozen promising sites remain to be explored.

Deep-water drillships are massive and highly specialised vessels that are rented by exploration and production companies such as Exxon for daily rates that can exceed hundreds of thousands of U.S. dollars. For example, the daily rates that Noble Corporation provides for its fleet range from tens of thousands to just under $500,000USD. Factors such as the price of oil, water depth, water pressure and each ship’s technical capabilities, all play an integral role.

The Stena Carron will reportedly be leaving Guyana for a few months of maintenance soon after the Noble Tom Madden arrives, but will return after that.

The presence of three drillships even for a short time puts Guyana in an unusual and possibly unique position. It’s rare for a very new oil region with no history of production to attract this kind of attention and investment. It’s a strong vote of confidence in Guyana from international oil companies.

It also points to the intensive exploration timeline for the Stabroek, as mandated by the production-sharing contract. The contract requires Exxon and its partners, Hess and CNOOC, to relinquish ownership of unexplored areas after a certain amount of time and mandates that they develop any discoveries rather than waiting.

As a result of initial success, the consortium has sped up its exploration goals and expanded its drilling areas as Guyana’s extraordinary run of successful oil strikes continues. It’s been a particularly remarkable string of finds, considering that in a normal frontier region a 20 per cent success rate for exploratory wells is considered standard.
Other companies are seeking to build on that momentum and invest even more in exploring for Guyana’s energy resources.

Tullow Oil, Eco Atlantic Oil, and Total plan to start drilling on the neighbouring Orinduik block in the third quarter of 2019, based on the success of the Hammerhead-1 discovery. That find was only seven km from the boundary that separates the Stabroek from the Orinduik.

This kind of interest can only be a good thing for Guyana and should assuage concern that the large size of the Stabroek and other blocks would somehow hinder development and exploration.

Instead, the incredible discoveries offshore are driving an increasingly ambitious exploration and development timetable that could continue to result in new finds and eventually in new wealth and new opportunities for Guyana.