Tullow in third oil strike
The location of the Carapa-One Well
The location of the Carapa-One Well

UK-BASED Tullow Oil has announced an oil discovery in the Kanuku Block offshore Guyana on Thursday at the Carapa-One Well, but the find is below the company’s pre-drill estimates.

The Carapa prospect was initially estimated as a 200-million-barrel cretaceous target but the well drilled encountered approximately four metres of “good quality oil”. This is compared to Tullow’s finds in the Orinduik Block at the Jethro-One Well which encountered 55 metres and the Joe-One Well which encountered 14 metres of net oil pay in high-quality oil bearing sandstone reservoirs of lower tertiary age and upper tertiary age respectively.
It can also be compared to ExxonMobil’s discoveries in the Stabroek Block at locations such as the Tilapia-One Well which encountered 93 metres or Exxon’s encountered well reported , the Pacora-One Well which met 20 metres – both of high-quality, oil-bearing sandstone reservoir.

Tullow’s Chief Operating Officer, Mark MacFarlane (Tullow Oil photo)

On Thursday, Bloomberg reported that Tullow’s shares fell as much as 20 per cent as the recent news adds to the doubt surrounding the company’s commercial viability of previous discoveries in Guyana which were found to contain heavy oil. “Expectations were high going into this,” said David Round, an analyst at BMO Capital Markets. “There will be a level of disappointment about the size.”

The company did not have a good 2019 as its stock declined 64 per cent and both its Chief Executive Officer and Exploration Chief stepped down. In a release, Tullow’s Chief Operating Officer, Mark MacFarlane, said that the result shines light on previous unknowns and will positively impact the company moving forward.

“The Carapa-One result is an important exploration outcome with positive implications for both the Kanuku and Orinduik blocks. While net pay and reservoir development at this location are below our pre-drill estimates, we are encouraged to find good quality oil which proves the extension of the prolific Cretaceous play into our acreage. We will now integrate the results of the three exploration wells drilled in these adjacent licences into our Guyana and Suriname geological and geophysical models before deciding the future work programme,” he said.

Preliminary results of drilling, wireline logging, pressure testing and sampling of reservoir fluid indicate the discovery of oil in Upper Cretaceous age sandstone reservoirs.

Meanwhile, rig site testing indicated that the oil is 27 degrees API with sulphur content of less than one per cent. Tullow will later present a detailed laboratory analysis of the oil quality. Tullow stated that the Carapa oil discovery suggests the extension of the cretaceous oil play from the Stabroek licence southwards into the Kanuku licence.

The Valaris EXL II jack-up rig drilled the Carapa-One well to a total depth of 3,290 metres in 68 metres of water and the well will now be plugged and abandoned. In 2018, Tullow increased its equity share in the Kanuku licence from 30 per cent to 37.5 per cent through a farm-in deal with Repsol. Repsol is the operator of the Kanuku Block and also hold a 37.5 per cent stake while Total E&P Guyana B.V. holds the remaining 25 per cent.

SHARE THIS ARTICLE :
Facebook
Twitter
WhatsApp

Leave a Comment

Your email address will not be published. Required fields are marked *

All our printed editions are available online
emblem3
Subscribe to the Guyana Chronicle.
Sign up to receive news and updates.
We respect your privacy.