Guyana: Drillship leaves contested waters

ExxonMobil has moved its drillship from the disputed waters offshore Guyana, where it recently made a significant oil discovery, triggering a maritime border spat between Venezuela and Guyana.

According to reports, the Transocean-owned Deepwater Champion drillship which had been used for drilling at the Lisa-1 prospect where Exxon struck oil in May, has completed its operations and moved away.

The vessel’s AIS data on MarineTraffic.com shows the drillship is currently located in the U.S. sector of the Gulf of Mexico, offshore Texas, more than 4000 kilometers away from its Guyanese drilling location.

Since the maritime area administered by Guyana has been contested by Venezuela, which claims sovereignty over the location of the concession ExxonMobil is operating at, it has been reported that Guyana authorities might have caved in to the pressure from its neighbor and had the ship removed from the block.

Electoral stunt?

However, Raphael Trotman, Guyana’s Natural Resources Minister told AFP that the rig had left the area as the exploration work was done, saying Venezuela’s claims are “nothing more than posturing ahead of elections.”

“Once the discovery was made, there is no more need for an exploration rig. You now have to have a production platform” the AFP has quoted Trotman as saying.

He reportedly also said that ExxonMobil is continuing to conduct seismic survey to “see if there are other wells nearby.” 

The seismic acquisition piece of information has been confirmed by Hess Corporation, which owns a 30 pct stake in the Exxon-run Guyana project. Hess on July 29 said Exxon recently kicked off the acquisition of 17,000 square kilometers of 3D seismic.

While it may be too early to call for a production platform after only one well has been drilled, Bloomberg in July quoted Trotman who said that the discovery could hold more that 700 million barrels of oil, adding that first oil could be expected within the next five years.

The discovery could be transformational for Guyana’s economy, Bloomberg further cited Trotman as saying. He also estimated the first oil could be expected by 2020. Based on the info received by Trotman, Bloomberg has calculated the discovery could be worth $40 billion.

ExxonMobil itself wouldn’t go into details about the size of the discovery. In its statement in May, the Texas-based oil giant said it had made “a significant oil discovery” on the 6.6-million acre Stabroek Block that is located 120 miles offshore. It said it encountered 295 feet of high-quality oil-bearing sandstone reservoirs.

During the 2Q 2015 conference call last week, Jeff Woodbury, Exxon’s vice-president of investor relations, said about the discovery: “We are encouraged by these results and we’re assessing commercial viability of the resource as well as evaluating additional potential on the block.” 

As for the border dispute, Woodbury said that Exxon followed all the laws within the host countries and international law, and said the Venezuela-Guyana issue was something the governments should address through appropriate channels.

Worth noting, both governments have been in touch with the UN Secretary-General Ban Ki Moon, who in July said he planned to dispatch UN Secretariat staffers to undertake a mission to both Guyana and Venezuela. He also expressed his willingness to further discuss the issue with the Presidents of both countries on the basis of the mission’s recommendations.

Drillship will come back

Amid a flurry of similar news reporting on the drillship leaving Guyana, which created an impression that the vessel had left in the past few days, Guyana Times has reported, citing an executive from Exxon, that the drillship had left the country in June, but will be back to the Starbroek block as early as 2016, or even earlier.

ExxonMobil has a contract with Transocean for the Deepwater Champion drillship until January 2016.

Offshore Energy Today Staff