Tullow will not commercialise latest oil find

Tullow Oil, headquartered in London, on Thursday announced its third successful oil discovery offshore Guyana; however, the company will not be moving to commercialise its latest find.

The find is lower than pre-drill forecasts, the company said in a statement.

“The Valaris EXL II jack-up rig drilled the Carapa-1 well to a Total Depth of 3,290 metres in 68 metres of water and the well will now be plugged and abandoned,” Tullow said.

The Well was drilled on the Kanuku licence offshore Guyana and encountered approximately four metres of net oil pay based on preliminary interpretation.

Rig site testing has indicated that the oil is 27 degrees API with a sulphur content of less than 1%, according to Tullow.

According to the Financial Times, Tullow Oil shares tumbled on Thursday after the explorer announced its results from the Guyana well. The oil and gas group’s share price fell as much as 20 per cent shortly after the open in London. The losses narrowed to a 7 per cent decline.

Despite this setback, the company’s Chief Operating Officer, Mark MacFarlane said the result is an important exploration outcome with positive implications for both the Kanuku and Orinduik blocks.

“While net pay and reservoir development at this location are below our pre-drill estimates, we are encouraged to find good quality oil which proves the extension of the prolific Cretaceous play into our acreage.

“We will now integrate the results of the three exploration wells drilled in these adjacent licences into our Guyana and Suriname geological and geophysical models before deciding the future work programme,” he noted.

A detailed laboratory analysis of the oil quality will follow in due course, Tullow said in its statement.

In 2019, Tullow announced two other discoveries at its Jethro-1 and Joe-1 wells.

While US oil giant, ExxonMobil has made 15 successful discoveries of light sweet crude on the Stabroek Block next door to Tullow’s operations, reports are that Tullow found heavy oil in its first two discoveries which will also be difficult to commercialise.

Repsol Exploración Guyana, S.A. is the operator of the Kanuku block with a 37.5% stake. Tullow Guyana B.V. also holds a 37.5% stake with Total E&P Guyana B.V. holding the remaining 25%.