Page 5 - LatAmOil Week 12 2023
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LatAmOil                                     COMMENTARY                                            LatAmOil


                         For example, it could conceivably lead to a situa-  observers have suggested that gas from Guyana
                         tion in which the winners of the auctions for the   could be sent to an LNG plant (perhaps via pipe-
                         two shallow-water sites designated as S2 and S3   line to neighbouring Suriname) to support an
                         find oil in the eastern ends of their blocks – and   export-oriented project.
                         must then negotiate unitisation with Tullow Oil   Georgetown has indicated, though, that
                         (UK/Ireland), the operator of the neighbouring   oil production and exports are its priority. In
                         Orinduik block. (This is a plausible scenario, as   the model contracts, it said that the primary
                         Tullow and its partners have made two sub-com-  option for associated gas ought to be utilisation   Guyana has
                         mercial discoveries in the Joe and Jethro sections   for purposes related to enhancing oil produc-
                         of Orinduik, and both of these fields are near the   tion. It explained that such purposes included   made clear
                         edges of the block.)                 gas re-injection, gas lifting and electric power   that it intends
                                                              generation and stated that investors would be
                         Oil the first priority               required to submit plans for full utilisation to   to make oil
                         Meanwhile, Guyana’s government has also made   the government.
                         clear with the release of the new contracts that   In the event that there are surplus volumes   and not gas
                         it intends to make oil and not gas the primary   of gas, it added, investors have several options.
                         focus of development activity in its offshore   They must agree to transfer their gas to the Min-  the primary
                         zone, at least for the time being.   istry of Natural Resources for disposal as the   focus of
                           There is certainly room to raise questions   state determines appropriate, surrender their
                         about what Guyana is to do with its gas reserves.   find to the government or draw up proposals   development,
                         Stabroek alone appears to hold at least 17 trillion   outlining their ability to make gas sales a viable
                         cubic feet (481bn cubic metres) of associated and   commercial proposition (on terms comparable  at least for the
                         natural gas, and ExxonMobil has already made   to those of oil sales).
                         arrangements with the Guyanese government to   These are probably long-term considera-  time being
                         use some of these volumes. Specifically, it will   tions, though, as Guyana’s most urgent priorities
                         pump associated gas from the Liza-1, Liza-2 and   will be to wrap up the bidding round, negotiate
                         Payara development sites to shore for the $1.2bn   and sign contracts and then clear the way for
                         Gas-to-Energy (GTE) project.         more exploration.
                           Meanwhile, Canada’s CGX Energy has hinted   Those hurdles really will have to be cleared
                         strongly that there is more gas in the northern   first for the question of what happens with
                         section of its Corentyne block, which lies adja-  respect to unitisation and gas utilisation to be
                         cent to the gassy sections of Stabroek, and some   more than theoretical.. ™





























                                                                                                                                NGC, PdVSA and Shell struck an initial deal for Dragon in 2018 (Image: PdVSA)















                                              The current bidding round includes 14 offshore blocks (Image: petroleum.gov.gy)



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