–despite challenges, Ratio Oil sees bright prospects in Guyana

DESPITE two dry holes by CGX Energy Inc in 2012 and the Venezuelan military’s forcible removal of Anadarko’s survey vessel in 2013, Ratio Oil pressed on in acquiring a Petroleum Agreement for exploration offshore Guyana, declaring it was not afraid of Venezuela.
This is according to Eitan Aizenberg, Chief Geologist and Manager of technical aspects of Ratio Guyana Limited. He gave a public lecture on Friday night at the Theatre Guild Playhouse under the auspices of the Ministry of Natural Resources.

“Immediately we submitted an application for Areas B and C in 2012. The area was open… no one wanted it. But what happened? Two very important wells were drilled in 2012 – Eagle 1 and Jaguar 1,” he said.

The wells turned out to be ‘dry holes’ and the risk was increased for the Guyana Basin.
“When this happens, you are standing in front of your investors and you have to justify yourself. They thought I was crazy anyhow,” he said.

According to Aizenberg, the Ministry of Natural Resources and the Environment at the time was reluctant to give Guyana Limited too much area to explore.
He said the ministry asked the company to choose either Block B or Block C. “So… we applied again in 2013 and we submitted for Block B,” he said.

However, in October 2013, the Venezuelan military seized a survey vessel, Teknik Perdana, which was carrying out survey operations on behalf of Anadarko. The crew of the vessel (some two dozen) was taken into custody.

“This [amounted to] another risk. Again I had to stand in front of the investors and say I don’t care about the Venezuelans. I will find a way to do it… we have to go ahead,” he said. According to the geologist, during a meeting in Miami, he stood up and said, “we are not afraid of Venezuela. We want to go ahead and find a way to work in Block B… now it is called Kaieteur,” he said.

“So we found a way to work around the Venezuelan crisis and in April 2015, the agreement was signed,” he said. Observers are of the view that the determination by Ratio to press on in the face of failed drilling campaigns and a clear and present Venezuela threat is testimony to the potential that Guyana’s offshore basin has and the confidence that international companies are placing in the offshore basin and investment landscape.

The Kaieteur Block, which is approximately 250 kilometres offshore in ultra-deep water, is located to the north and adjacent to the Stabroek and Canje blocks.

Ratio Guyana Limited completed a 3-D seismic survey of the Kaieteur block in 2017.
The Production Sharing Agreement (PSA) between Guyana and Ratio has cost-oil percentage of 75 per cent and the 25 per cent balance profit-oil split 50/50 for government and contractor.

Further, a royalty of 1 per cent payable by the government’s take of the profits is specified in the Ratio Guyana Limited contract.

The Ratio Guyana Limited agreement was signed on April 28, 2015 by then President Donald Ramotar and the President of Ratio Energy Limited, the parent company of Ratio Guyana Limited.

Ratio Guyana Limited, whose parent company is Israel-based, is a joint-venture partner of ExxonMobil subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) in Guyana’s offshore Kaieteur Block. EEPGL has the majority stake at 50 per cent, while Ratio Guyana Limited and its parent company, Ratio Energy Limited, each have a 25 per cent stake.