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Exploration activity in Guyana expected to increase in 2021

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Rystad Energy expects exploration activity to pick up significantly in Guyana, with 16 wells planned offshore in 2021.

The year’s first completed well, Bulletwood-1 in the ExxonMobil-operated Canje block, encountered quality reservoirs but non-commercial hydrocarbons, according to Westmount Energy, which holds a stake in Canje partner JHI Associates. The well was targeting more than 500 million bbl of mean prospective resources in a prospect similar to Liza in the neighboring Stabroek block.

Guyana’s exploration activity will be spearheaded by ExxonMobil as operator of the Stabroek and Canje blocks. Having set an ambitious divestment target of $15 billion by offloading mature assets in Asia, Europe, and Africa, the US supermajor is expected to prioritize investments in high-value assets such as Stabroek.

Rystad said ExxonMobil’s drilling activity will focus on firming up resources in the southeastern part of the Stabroek block, where the operator identified deeper plays underneath the existing discoveries and is now eyeing the unexplored northwestern parts of the block. In addition, work is lined up on the Canje block.

“Rystad Energy data suggests that close to 300 million barrels of oil equivalent has been discovered on average for each exploration well – wildcat and appraisal – drilled in the country over the past six years. With around 16 exploration wells planned, including some in riskier frontier regions, 2021 holds a lot of promise,” said Santosh Kumar, Upstream Analyst at Rystad.

Rystad Energy projects an increase in drilling activity offshore Guyana in 2021, following a drop-off after the 2020 oil price downturn. The ExxonMobil-operated Stabroek and Canje blocks are expected to drive exploration in the region this year.

ExxonMobil’s fleet of contracted drillships in Guyana is set to increase to six with the arrival of the Noble Corp’s Noble Sam Croft in April. Rystad also noted that three drillships are currently performing development drilling activity in the greater Liza area. The recently arrived Stena DrillMAX from Stena Drilling already initiated drilling activities on the Longtail-2 appraisal well, while the Stena Carron drillship, which recently concluded drilling Bulletwood-1, has now spud the Jabillo-1 exploration well in the Canje block.

The operator and its partners plan to deploy four floating production, storage and offloading units (FPSOs) to develop the existing resources within the block. However, the supermajor is expected to ramp up drilling activities, as it plans to have at least five FPSOs online by 2026. Success at this year’s Mako-2 and Uaru-2 wells on the Stabroek block could potentially firm up the Mako/Uaru area as a candidate for the next FPSO location. On the Canje block, plans are in place to drill two wells in 2021 in addition to the uncommercial Bulletwood-1 find, with the Jabillo well already in progress. No further exploration plans are expected for the Kaieteur block.

Canada-based explorer CGX Energy operates the Demerara and Corentyne blocks with 66.67% interests, with Frontera Energy as its consortium partner. The plan for 2021 consists of up to two exploration wells, at a combined estimated cost of about $90 million.

Rystad said there are no drilling plans reported for this year as yet on the Repsol-operated Kanuku block and Tullow Oil’s Orinduik block. However, 3D seismic reprocessing is scheduled to mature prospects for future drilling.

In eastern Guyanese waters there are only two unallocated blocks: Block C, which lies east of the Kaieteur block and north of Stabroek, and a smaller 1,325 square kilometers block, which was relinquished by the Canje consortium.

The other unallocated offshore deepwater region lies northwest of Guyana’s offshore sector. This area, formerly called the Roraima block, is bordered by the Kaieteur and Stabroek blocks. It is, however, part of a territorial dispute between Guyana and Venezuela, therefore potentially struggling to generate interest.

In the middle of this exploration activity, Guyana is mulling over a new bidding round that could see the light of day in 2022. Rystad expects drilling results to be “eagerly watched” by the services industry, as more exploration success off Guyana would translate into new opportunities following the market slump of 2020.

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