REPSOL, the Spanish oil exploration and production firm, plans to drill the deepest offshore well in Guyana, with a 50 percent chance [sic 15%?] of finding commercial reserves, according to a senior company official.
Addressing the mid-year dinner of the Georgetown Chamber of Commerce and Industry (GCCI), REPSOL’s Country Manager, Giancarlo Ariza said the more than four-mile deep well in August or September of this year.
“The type of equipment is specialized and has very stringent performance conditions,” he told the well attended event held Wednesday night at the Pegasus Hotel.
The high pressure/ high temperature well will be sunk 107 miles away from Georgetown in the 3,735 square kilometre Georgetown block near the border with Suriname. The temperature will be about 400 degrees, he said.
The US$110 million project, the first offshore drilling here in 10 years, is expected to last six months.
Drilling should have started in May but, according to Ariza, bad weather and other reasons caused the rig to be delayed off Suriname.
Against the background of the massive environmental crisis caused by British Petroleoum’s (BP) undersea oil spill in the Gulf of Mexico, Ariza assured that there would be a proper emergency response plan.
“We need to assure the Government of Guyana and people that we will be taking all precautions on 110 percent safe side,” he said.
Although the Spanish oil-giant has so far spent US$30 million various seismic and geological studies, he cautioned that there was no certainty that oil would be found in commercial quantities.
“Neither we nor anybody else can make assurances that oil will be found. The opportunities are based on statistical results,” he told business executives.
Another US$17 million are being spent on purchasing goods and services locally. These include catering, fuel, transportation, radio communications, ports, aircraft, medical and the storage of pipes. Sixty one percent of the employees would be Guyanese and 39 percent expatriates.
Also present were presidential candidates for governing Peoples Progressive Party Civic (PPP), Donald Ramotar and his counterpart for the main opposition Peoples National Congress Reform (PNCR), David Granger.
The REPSOL official said that even if drill results look promising, commercial production will not begin until another nine years. He explained that if initial findings are positive geological and geophysical analysis and other tests of the fluids will have to be conducted to pin-point the exact location of the discovery.
A production well would be built in the middle of the fourth year to facilitate early production and before full production begins in year nine.
Based on international experiences, he urged Guyanese not to be daunted by the fact that 25 wells have been drilled here since 1950 but none has spud commercial quantities.
REPSOL, said to be among the 10 biggest oil firms, came to Guyana in 1997 but its exploration work had been delayed by the now resolved Guyana-Suriname maritime boundary dispute.
The GCCI’s 2nd edition of Business Guyana- An Investor’s Guide to Doing Business in Guyana- was also launched at the dinner.
The 90-page publication features articles on oil, hydro-electricity, financing, removing encumbrances to trade and a labour laws primer.