Energy News Today

Have Oil Majors Given Up On French Guiana?

A tiny remaining bastion of France’s former colonial empire, French Guiana in northeastern South America, was once thought to possess tremendous petroleum potential which could spark a Guyana-sized petroleum boom. Not only do French Guiana’s territorial waters include part of the prodigious Guyana-Suriname Basin but its offshore ocean floor is thought to share geological characteristics with the West African Atlantic margin where the giant Jubilee oil discovery was made by Tullow Oil. Any major hydrocarbon discovery could be a tremendous boon for the impoverished French overseas territory, which has the lowest reported gross domestic product of any of France’s regions. The U.S. Geological Survey estimated in 2000 that the Guyana-Suriname Basin had mean undiscovered crude oil resources of over 15 billion barrels, underscoring the considerable potential that exists in offshore French Guiana. While on paper the French territory’s oil potential appears considerable, actual results haven’t supported that positive outlook. French Guiana’s oil exploration history is mixed and there have been few discoveries made over the last decade, despite the considerable drilling success reported for Guyana’s section of the Guyana-Suriname Basin. Way back in 2011, Africa and South America-focused oil explorer Tullow made the Zaedyus-1 oil discovery in the Guyane Maritime license. At the time Tullow was the operator of the license and held a 27.5% interest with the remainder shared by partners Shell (45%), Total (25%), and Northpet (2.5%). French oil supermajor Total eventually took 100% control of the Guyane Maritime license. The objective of that drilling program, according to Tullow, was to determine whether the geological characteristics which led to the offshore West Africa Jubilee oil play were mirrored on the other side of the Atlantic ocean. The Zaedyus-1 discovery was then followed by a slew of disappointing drilling results and dry wells. The Zaedyus-2 well, which was drilled to 6,200 meters in 2012 five kilometers up-dip from Zaedyus-1, failed to find commercial hydrocarbon formations. In 2013 Tullow tried again, drilling the Priodontes well to 6,381 meters with no hydrocarbons found, resulting in the plugging and abandonment of the well. Tullow then went on to drill the GM-ES-4 well where no oil was discovered and then in November 2013 the company completed the GM-ES-5 well which was also dry. The four unsuccessful wells were the culmination of the drilling program started by Tullow and its partners after the Zaedyus-1 oil discovery. In December 2018, the French oil supermajor announced it was drilling an exploration well in offshore French Guiana roughly 150 kilometers from the nearest coast to confirm whether an exploitation phase was appropriate. That well came up dry and Total announced in February 2019 that it was abandoning offshore drilling operations in French Guiana. 

Related: Oil Market Even Tighter As 500,000 Bpd Come Offline In Canada


Those results are a bad omen for the detection of commercially viable quantities of hydrocarbons that can be extracted from the overseas French territory’s territorial waters. Recently, there has been a significant volume of poor drilling results reported for wells completed in the Guyana-Suriname basin in neighboring offshore Guyana and Suriname. Tullow failed to find oil with its 2017 Araku-1 exploration well in Block 54 offshore Suriname while Apache’s Kolibrie-1 well drilled the same year in Block 53 failed to find commercial quantities of hydrocarbons. Kosmos’ 2018 Anapai-1A exploration well in offshore Suriname Block 45 came up dry. Global oil supermajor ExxonMobil which has experienced considerable success in the prolific Stabroek Block in offshore Guyana where it has found over eight billion barrels of recoverable oil resources is experiencing its own dry run. Exxon’s November 2020 Tanager-1 well in the Kaieteur Block northeast of Stabroek failed to discover commercial quantities of hydrocarbons and its January 2021 Hassa-1 well in the Stabroek Block came up dry. The energy supermajor recently announced the Bulletwood-1 well in the Canje Block offshore Guyana, where it is the operator and holds a 35% interest with partners Total (35%), JHI (17.5%), and Mid-Atlantic Oil & Gas (12.5%), was dry. Those additional drilling results from neighboring offshore Guyana and Suriname combined with the outcome of Tullow’s drilling program in French Guiana augur poorly for the French overseas territories’ crude oil potential.

A major impediment to offshore drilling in French Guiana is the French national government’s complete ban on the extraction of crude oil and natural gas in any of France’s territories, which comes into effect in 2040. That caps the amount of time available for energy companies to conduct exploration and exploitation campaigns in offshore French Guiana. In 2019 energy industry consultancy Wood Mackenzie claimed there would only be one more exploration campaign in offshore French Guiana and that drew to a close with Total ceasing drilling operations in the country. Arguably, 19 years is insufficient time to undertake the required exploration, appraisal, and then development drilling to bring a commercially viable crude oil discovery online, recoup the capital invested and then generate profits. When that is then coupled with the poor exploration history of offshore French Guiana, weak oil prices, the volatile outlook for crude oil prices and the looming emergence of peak oil demand, it is a risky jurisdiction for energy companies with little upside.

By Matthew Smith for Oilprice.com

More Top Reads From Oilprice.com:

Read More: Have Oil Majors Given Up On French Guiana?

2021-03-06 18:00:00

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy
%d bloggers like this: