Guyana, a tiny South American country with a population of less than a million, has suddenly become a crude oil powerhouse with over 30 high-grade large discoveries in the last few months. The US oil major, ExxonMobil, has discovered 11 billion barrels of oil resources in Guyana’s offshore Starbroek Block, placing the country in the league of big oil resource nations. This is the first major discovery in 20 years 13 continuous drills near dry wells named ‘Mangla’ were made in the Barmer Basin in Rajasthan in 2003, with an investment of US$100 million and estimated reserves of 1 billion barrels.
Encouraged by ExxonMobil’s series of discoveries, Guyana has now started exploration in another location with the potential for oil reserves. While exploring the possibility, CGX Energy discovered Wei-1 exploration well in the Corentyne Block, following the 2022 Kawa-1 discovery in the same block. The new discovery at Corentyne Block bodes well for Guyana’s oil boom and is set to get momentum in the future.
In mid-June, CGX announced the discovery of oil with the Wei-1 wildcat well. The company stated that 71 feet of net oil pay was found in the secondary reservoir targets in the Maastrichtian and Campanian intervals. In the last week of June, CGX announced that the Wei-1 encountered 210 feet of hydrocarbon-bearing sands on the Santonian horizon. However, details such as the volume of deposits and the exploration process are yet to be made public due to technical glitches.
| World’s top 10 countries in crude oil reserves |
| Country | Volume (billion barrels) | Percentage of world total (%) |
| Venezuela | 303.8 | 17.5 |
| Saudi Arabia | 297.5 | 17.2 |
| Canada | 168.1 | 9.7 |
| Iran | 157.8 | 9.1 |
| Iraq | 145.0 | 8.4 |
| Russia | 107.8 | 6.2 |
| Kuwait | 101.5 | 5.9 |
| United Arab Emirates | 97.8 | 5.6 |
| United States of America | 68.8 | 4.0 |
| Libya | 48.4 | 2.8 |
Source: Industry
Meanwhile, CGX reported that rock and fluid samples from the Santonian interval are being evaluated by an independent third-party laboratory to determine the net oil deposits and characteristics of the reservoirs discovered. The driller anticipates that the process will take at least two to three months to complete. While announcing the discovery of the Kawa-1 well in the past, CGX said, “The Kawa-1 well encountered approximately 177 feet (54 meters) of hydrocarbon-bearing reservoirs within the Maastrichtian, Campanian, and Santonian horizons based on the initial evaluation of Logging While Drilling (LWD) data. These intervals are similar in age and can be correlated using regional seismic data to recent successes in Block 58 in Suriname and the Stabroek Block in Guyana.”
Experts, however, confirm the assumption that the Corentyne Block contains considered hydrocarbon resources. An independent study conducted by McDaniel & Associates Consultants Ltd, released in 2021, estimated the deposits to be between 1.5 billion and 7.3 billion barrels for the northern section of the Corentyne Block. The report covers the entire block with estimates ranging between 1.7 and 10.7 billion barrels of oil equivalent in this Block.
Heading toward a major petroleum explorerCrude oil discovery in Guyana began in 2015 but had limited success. However, the country has now reported Wei-1 as the 45th oil discovery in Guyana in its territorial waters, making a significant milestone in oil exploration. Guyana is steadily progressing towards becoming a major petroleum producer and explorer. Notably, the two discoveries made by CGX and partner Frontera Energy, which holds a 68 percent non-operated working interest in the Corentyne Block and 77 percent of CGX, are particularly important for Guyana’s offshore oil boom. CGX is owned by Frontera, which has an almost 93 percent consolidated stake in the Corentyne Block.
ExxonMobil’s latest 30 discoveries, totaling more than 11 billion barrels, have further increased the potential for oil reserves in Guyana. There are speculations that the current trend of petroleum discoveries may extend through the northern part of the Corentyne Block and into Block 58 offshore Suriname, where TotalEnergies and its 50 percent partner Apache have made five discoveries.
Interestingly, Kawa-1 and Wei-1 discoveries have been beneficial for Spanish energy major Rapsol in its efforts to explore oil in the neighbouring Kanuku Block. Rapsol owns a 37.5 percent stake in the Kawa-1 and Wei-1 discoveries, while Tullow Oil and TotalEnergies hold the remaining 37.5 percent and 25 percent, respectively. Rapsol has not yet made any commercially viable discoveries on the Kanuku Block. The company’s last exploration well, Beebei-Potaro, was completed in August 2022 and discovered oil but had to be capped and abandoned due to traces of water-bearing oil deposits in the well. The new discoveries by CGX will be encouraging for Rapsol, which is considering conducting a field survey to maximize the chances of successfully making an oil discovery in the Kanuku Block.
The turnaroundThe success of Guyana came after several unsuccessful attempts in the past. However, the focus on exploring the deep offshore area gained momentum when major oil companies started paying attention to its hydrocarbon potential following the US Geological Survey in 2001. The United States-headquartered ExxonMobil emerged as the winner for the exploration of Liza discovery in 2015. Understandably, the Liza-1 well marked the first significant oil deposit offshore Guyana. The company drilled well five kilometers below the sea bed and encountered approximately 90 meters of high-quality oil-bearing sandstone reservoirs.
The dramatic turnaround began with the flow of the first oil from an offshore oil well into the Floating Production Storage and Offload vessel (FPSO), known as Liza Destiny. In December 2019, Guyana is now moving ahead to become one of the largest per capita oil producers in the world by 2030. Notably, Guyana’s new oil discovery is 11 times larger than India’s Barmer discovery. With a significant volume of oil discovered, Guyana is currently working on developing oil refineries, and the process of selecting potential bidders is underway.
DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com
