…President’s office to take over oil portfolio from Trotman
ExxonMobil has discovered oil in a new well offshore Guyana. This announcement was made during Cabinet’s discussions on Tuesday when it was also disclosed that Government planned to strip away the responsibility for the oil sector from Natural Resources Minister Raphael Trotman.
Immediately following the conclusion of Cabinet discussions, Trotman informed the media that he would, in the coming months, no longer have responsibility for the oil sector, a role he has faced much criticism about.
Instead, he revealed that based on a proposal he made – a Department of Energy would be created under the Ministry of the Presidency to manage the sector. While he will ultimately no longer have responsibility for the sector, he will still oversee the staffing of the unit.
“Minister Trotman has been appointed head of the Task Force, which will be responsible for submitting to Cabinet a proposal on how the Department of Energy is to be structured and staffed. The Task Force will also comprise other Ministers of Government,” a release from the Department of Information later stated.
Since the revelation of a secret signing bonus, the emerging sector has been mired in controversy. When it renegotiated an agreement with oil giant ExxonMobil, Government collected a US$18 million signing bonus from the company. However, the Government failed to disclose this transaction to the nation, despite several officials, including Trotman, being questioned about it by the media.
This continued until the document was leaked to the media. Proof of the bonus came to light when the letter dated September 2016 and addressed to Bank of Guyana Governor, Dr Gobind Ganga was leaked last year. The letter had instructed him to set up a special account for the money
This forced Government to admit to receiving the money, and there has since been much criticism of the subterfuge, with Government explaining that the money was to be used to procure lawyers for Guyana’s border controversy case when it is heard at the International Court of Justice (ICJ).
More oil
Meanwhile, ExxonMobil’s Senior Director of Public and Government Affairs, Kimberly Brasington confirmed that there has been another oil find – this time in the Pacora-1 well. She assured stakeholders that further information would be provided soon.
The Stabroek Block is 6.6 million acres. Esso Exploration and Production Guyana Limited is the operator and hold a 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 per cent interest.
In May 2015, Exxon confirmed that more than 295 feet of high-quality oil-bearing sandstone reservoirs was encountered at its Liza 1 exploration well.
In late June 2016, Exxon’s drilling results at Liza 2 revealed more than 58 metres of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 5475 metres at 1692 metres water depth. Drilling results confirmed recoverable resources to be between 800 million and 1.4 billion barrels of oil equivalent.
The company had announced that it made its third significant discovery in its drilling explorations offshore Guyana. Its partner, Hess Corporation, had noted that the Liza 3 exploratory well’s net value could be US$6.2 billion based on calculations from the Bank of Montreal (BMO) Capital Markets.
Drilling on Payara began on November 12, 2016, with initial total depth reached on December 2, 2016. In January of 2017, the oil giant had announced it had struck some 95 feet of oil reservoirs in its Payara-1 well, targeting the same type of reservoirs as the well’s Liza counterpart.
Oil was discovered in the Turbot-1 well in October of 2017. According to the oil company following the discovery, the well reservoir was 75 feet deep. Drilling has been ongoing at the Turbot well since August 2017.
Then, in what is actually its second biggest single oil reservoir find to date in Guyana’s waters, ExxonMobil had announced the discovery of 230 feet of high-quality oil in its Ranger-1 well recently. This means that there is potentially 3.2 million recoverable barrels of oil in the block.
It had been understood that following the completion of the Ranger-1 well, the Stena Carron drillship would move to the Pacora prospect, four miles from the Payara discovery. Additional exploration drilling is planned on the Stabroek Block for 2018, including potential appraisal drilling at the Ranger discovery.
