Major oil firms begin drilling in Guyana-Suriname Basin

A drilling consortium exploring for commercial amounts of oil and natural gas off the coasts of Guyana and Suriname has started to drill its first well, as activity in the area rises to its highest to date.

Murphy Oil, Inpex, Repsol YPF, Tullow and CGX Energy have secured the Atwood Beacon jack-up rig to test four blocks in the basin over the next year. According to Oil Daily, the Atwood Beacon rig is slated to drill five wells in the highly prospective but underdeveloped basin. The first well, Caracra, was spud on 8 November in the Murphy-operated Block 37 offshore Suriname. Murphy will start drilling its second well, Aracari, next month, following which the Atwood Beacon will move to the 100 per cent Inpex-operated Block 31 next door, before moving to Guyana.

Within the first quarter of 2011, the Repsol operated Jaguar will test the Georgetown concession, which is targeted to have a potential of 700 million barrels of oil. The U.S. Geological Survey said in 2000 that the Guyana-Suriname Basin has the second largest unexplored oil potential in the world after Greenland.

Lastly, the Atwood Beacon will make its way to the CGX Corentyne Concession, allowing the company to resume operations halted a decade ago by developments in an old border dispute between Guyana and Suriname. CGX had planned then to test its Eagle prospect by drilling a well, but work was halted when two gunboats from the Suriname Navy ordered the rig removed. The United Nations Tribunal on the Law of the Sea handed down a ruling in Guyana’s favour, leaving the majority of the Corentyne and the Eagle prospect under Guyana’s jurisdiction.    

“It’s a very exciting time,” CGX energy executive, Kerry Sully, reportedly told investors at a recent conference hosted by the New York Society of Security Analysts.

CGX holds licences covering 7.8 million acres in the basin, including Georgetown and Corentyne, but is looking to farm out a portion of its interests in those two holdings.

Sully described the region as part of a broader “emerging equatorial Atlantic” play that includes new multi-billion-barrel discoveries off the coast of Brazil, and new West African discoveries from Ghana to Sierra Leone.

Prior to this, companies such as Royal Dutch Shell, Total, Korea National Oil Corp and Burlington Resources had entered the region in the late 1990s, but a series of political and geological factors had stymied development.