December 22, 2006

ExxonMobil set for Guyana drive -

Supermajor to restart Stabroek exploration as border rows ease

Upstream Magazine by Gareth Chetwynd, Cartagena, Colombia

ExxonMobil is looking to revive exploration off Guyana as some of the heat goes out of territorial disputes involving neighbouring countries Venezuela and Suriname.

The supermajor has a large offshore exploration position on Guyana 's Stabroek block, covering about 60,000 square kilometres in water depths ranging from 600 to 10,000 feet, but exploration plans were put on hold when territorial disputes flared up at the start of the decade.

A dispute with eastern neighbour Suriname dragged the territorial issue into the international spotlight in 2000.

A jack-up rig leased by CGX of Canada was forced off its location by gunboats from the Surinamese navy, interrupting drilling operations that had been authorised by the Guyanan government.

Venezuelan claims have also contributed to the near paralysis of exploration activities in Guyana.

Venezuela has never formally abandoned 19 th Century claims to a swathe of territory west of the Essequibo river, representing more than 60% of Guyana territory.

The dispute flared up when Guyana unveiled plans to allow a US company to operate a rocket base in the region.

Venezuela responded by threatening to offer exploration concessions in the disputed area.

Relations with Venezuela have improved since then and Venezuelan President Hugo Chavez has signalled that his administration will not oppose a future move by Guyana to grant oil concessions in the Essequibo region.

Guyana was among the Caribbean nations that recently backed Venezuela 's unsuccessful bid for a non-permanent seat on the UN Security Council.

Hopes for a settlement to the Suriname dispute have also improved since 2004 when a UN tribunal was established to handle the issue. Arbitration proceedings are currently gathering pace.

The Stabroek permit has been under force majeure for several years, but ExxonMobil has recently stepped up talks with Guyanan authorities and intensified the process of evaluating the area within the context of its exploration portfolio.

The acreage includes a large area on the eastern side of Venezuela 's gas-prone Plataforma Deltana region. We are talking about how we can move forward and maybe do some seismic acquisition, said Bill Drennen, vice president for the Americas with ExxonMobil's exploration company.

Drennen acknowledged significant obstacles as Guyana resolves problems involving its eastern and western borders, but remained cautiously optimistic.

There are still some areas that are sufficiently in the middle to be far enough away from these disputes, offering a more comfortable position, he said, without giving a likely timetable.

ExxonMobil retains a 100% interest on its Guyana block, although it is understood that the company has received some approaches.

Spain 's Repsol YPF is among the potential suitors and has plans to drill two exploration wells next year in Suriname 's offshore Block 30.