The oil and gas industry is ready to profit from the end of a long-running maritime dispute between Guyana and Suriname, with numerous companies interested in the region.
A United Nations tribunal settled the dispute in 2007, awarding Guyana sovereignty over more than 12,837 sq miles of the coastal waters, while Suriname received 6,900 sq miles (OGJ Newsletter, Oct. 1, 2007). Now, the results are coming in.
The most recent result involves Tullow Oil PLC, successful in Ghana and ready for more in Uganda, which brought the diplomatic success story into sharper focus after signing a heads of agreement with Staatsoilie Maatschappij Suriname NV.
"Tullow is very pleased to have signed this heads of agreement with Staatsoilie for such an exciting block in the Equatorial Atlantic region of South America," said Angus McCoss, Tullow exploration director.
"The group is seeking to replicate the transformational success achieved with the Jubilee field in Ghana and this new acreage complements our existing positions in Guyana and French Guiana," McCoss said.
100% interest
Tullow signed the HOA with Staatsoilie in relation to Block 47, a 2,369 sq km deepwater exploration license off Suriname between Guyana and French Guyana on South America's northeastern coast.
Tullow said it will operate the license with a 100% interest during the exploration phase, while Staatsoilie has the option to participate during the development and production phases with a 20% interest.
According to Tullow, the signing will enable the parties to finalize a production-sharing contract for the block, and also will enhance the firm's portfolio of high-impact exploration acreage in the emerging Suriname-Guyana basin.
Analyst BMI said Tullow invested £6 million in 2009 on its assets in Suriname, Guyana, and French Guyana, and that it plans to begin exploratory deepwater drilling in the area in 2011.
"Its contract for the major part of French Guyanese territorial waters, in particular, has attracted strong investor interest, prompting farm-in deals with majors Total and Royal Dutch Shell in late 2009," BMI said.
Potential recognized
Tullow and the majors are hardly alone in recognizing the potential in the Suriname-Guyana basin, which Kerry Sully, president and chief executive officer of Canada's CGX Energy, said is the world's second most attractive under-explored basin with a potential of 15.2 billion bbl of oil.
CGX last year said it would begin drilling off Guyana after the end of the long-running dispute with Suriname over their maritime border.
The end of the maritime dispute also seems to have moved Murphy Oil, which announced in January plans to start drilling soon on Block 37 in Suriname. "We plan to drill two wells back-to-back starting late in the year," said Murphy Pres. and Chief Executive Officer David Wood, adding that Murphy, which has a 100% interest in the offshore area, is targeting reservoirs of 100 million bbl.
Chalk up a victory for oil diplomacy.
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