energized future

World’s Oil and Gas Companies Eye Guyana’s Rich Offshore Waters

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enezuela, Guyana’s neighbor to the west, boasts the planet’s biggest petroleum reserves — even larger than Saudi Arabia. And Brazil, its neighbor directly to the south, has become a major oil producer and exporter in its own right.

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Trinidad and Tobago

Venezuela

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Guyana

No wonder the world’s energy giants have their eyes trained on Guyana, which may be poised to become an energy Zaedyus Well heavyweight in the region. The U.S. Geological Survey says the offshore Guyana-Suriname Basin holds a Suriname potential 13.6 billion barrels of oil and 32 trillion cubic feet of natural gas, making it French Guiana one of the biggest potential reserves of hydrocarbons in the Western Hemisphere. “It’s clearly an exciting basin to be in,” Kilometers said Suresh Narine, executive chairman of 0 125 250 Toronto-based CGX Energy Inc., director of the Trent Centre for Biomaterials Research, and professor at Trent University in Canada. For now, the emphasis is on prospecting. We have a offshore prospecting licenses for CGX. The 15-year old Narine, who joined the CGX board in petroleum-sharing agreement that comes after a company will also overhaul its technical management January 2012 and became chairman in May, said the discovery. They’re not onerous because we want the team and its board of directors. company has a local workforce of 85, which can climb basin to be developed. We need to attract the right “Guyana is right now the best play in the Western to 200, including sub-contractors, when actively drilling. players here.” Hemisphere,” said Ronald Pantin, CEO of Pacific “We have spent more than $200 million, which is Persaud said his government is currently drafting a Rubiales, adding that his company understands “very more than 50 percent of all oil exploration dollars ever petroleum development policy that will be ready in the well the geology of this basin.” spent in Guyana,” said Narine. “We are a tiny company, next few months. Repsol YPF SA, a Spanish-Argen­ but there are some inherently valuable “We’re working with the U.S. Department of the tine oil conglomerate, is also active in things about CGX, such as our in-country Interior as well as the Canadian government,” he said. the Guyana-Suriname Basin. Last year, relationships. We have employed more “We want to ensure that the country benefits, and that the company drilled an exploratory Guyanese than any other company we’re saved from the resource curse. This is a very well located 107 miles offshore to a operating in petroleum.” depth of 21,500 feet. Since 1997, Repsol complex and costly exercise, which is why we try to In July 2012, Colombia-focused Pacific has invested about $33 million for their work with the companies without compromising our Rubiales acquired a 36 percent stake in 15 percent share in the well in Guyana, national legislation.” CGX. In March 2013, CGX announced a Narine said it is imperative that Guyana develops with total new drilling expected to cost private placement of $35 million to $40 its own oil and gas industry — because the dividends an additional $300 million. million, subject to shareholder approval, will help the government alleviate concerns many “The probability of success of the that would increase Pacific Rubiales wealthier countries have that less-developed nations first well was 11 percent, and the interest to 65 percent of CGX, and provide will spark climate change and environmental probability of success for this new CGX the capital it needs to launch its next destruction by exploiting their resources. project is 15 percent. So we have to stage of oil exploration in the basin. Photo: Larry Luxner “Once we [realize the potential] of our petroleum make seven wells to find only one “We have done more seismic work Professor Suresh S. Narine, resources, the capital we create out of that will go to discovery,” said a Repsol official. and have drilled more wells than chairman of CGX Energy define a sustainable future for us,” he said. “Guyana has “There have been 26 wells drilled off anybody else in the Guyana Basin,” Inc., a major investor a crippling dependence on imported power. Long Guyana’s coast in the last 50 years and added Narine. “More importantly, many in Guyana’s offshore before the world faces the specter of the end of oil, its nobody’s found anything. But former employees of PDVSA [Petróleos oil sector. price will become so prohibitive that unless we produce remember that in the North Sea, 74 de Venezuela] now work with Pacific our own, our industries will be decimated.” wells were drilled before oil was discovered.” Rubiales. They have an 83 percent geological success But striking oil and natural gas in the GuyanaIndeed, Robert Persaud, Guyana’s minister of rate in Colombia, Peru and Brazil, and they bring the Suriname Basin would be a boon to Guyanese industry natural resources and the environment, says the most advanced technology available.” — not to mention the energy companies involved in the business of oil exploration is a risky one — but one that Together, CGX and Pacific Rubiales say they plan to endeavor. carries huge rewards for those who persevere. invest $600 million to $1 billion in oil exploration The surge in interest is a dramatic turnaround from “Our chances are good, but you have to hit the right activities over the next five years, now that Guyana’s area. Libya discovered oil after 57 wells were drilled. Geology and Mines Commission has renewed three Continued on Page 22 Corentyne PPL

April • May 2013

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