Spud window set for new exploration well off Guyana

Canadian oil and gas company CGX Energy plans to drill its first exploration well offshore Guyana during the course of the next month, using a Maersk Drilling-owned rig.

The Kawa-1 well is located in the Corentyne Block where CGX Energy is the operator and Frontera Energy is its partner. CGX has already secured all necessary contracts to drill the Kawa-1 well.

Last week, several news reports appeared stating that CGX Energy had started drilling the Kawa-1 well on 2 July 2021. The reports were apparently based on a notice to mariners by Guyana’s Maritime Administration Department (MARAD).

Following these reports that the well had been spud, Offshore Energy reached out to Frontera and CGX seeking confirmation of the info provided by MARAD as well as further details on well operations. However, Frontera told us that the well had not been spud. Namely, the confusing or misleading nature of the pending notice caused it to be misinterpreted.

Frontera also told us that the well would be spud later this quarter.

CGX’s previous deadline to drill an exploration well on the Corentyne block was in November 2020 postponed by a year, extending it to 27 November 2021.

In its latest update on Monday, Frontera revealed that the Kawa-1 well is now expected to be spud between August 1-15 and reach total depth in approximately 85 days.

The primary target for the Kawa-1 well is a Santonian age, stratigraphic trap, interpreted to be analogous to the discoveries immediately to the east on Block 58 in Suriname. TotalEnergies is the operator of this block off Suriname and it has, so far, made four hydrocarbon discoveries on the block with further appraisal and exploration campaign planned for this year.

Data analysts believe that Suriname has the potential to become the next oil production hub in the near to mid-term. As both Guyana and Suriname share the same geological trend of the prolific Guyana-Suriname basin, Suriname has huge potential for repeating Guyana’s oil exploration success demonstrated by ExxonMobil’s numerous hydrocarbon discoveries in the country.

However, it is worth noting that ExxonMobil’s latest attempt to find oil off Guyana failed as the Jabillo-1, located on the Canje Block, came up dry.

Issued last Friday, a new notice to mariners by Guyana’s MARAD stated that drilling operations on the Kawa-1 well are scheduled to conclude on 15 December 2021 and will incorporate the use of the PSV Breaux Tide and OSV Polaris.

Gabriel de Alba, Chairman of Frontera, commented: “We are pleased to continue to advance our activities in one of the world’s most important new oil and gas blocks in the last decade”.

The Kawa-1 well is located in the northeast quadrant of the Corentyne block approximately 200 kilometres offshore from Georgetown. The water depth is approximately 355 meters and the expected total depth of the well is 6,575 meters.

The well will be drilled using the Maersk Discoverer, a sixth-generation semi-submersible drilling rig currently working in Trinidad for another operator. Previous contract data show that the rig is currently under contract with BP, scheduled to end in August. The drilling contract for exploration drilling in the Corentyne Block was awarded back in April 2021.

Preparing for drilling operations earlier this year, CGX in March 2021 revealed that the total cost of the two-well exploration program in Guyana would be approximately $90 million. The campaign consists of two wells, the Kawa-1 well and the Makarapan-1 well. located in the Corentyne and Demerara blocks, respectively.

The Makarapan-1 exploration well on the Demerara block is currently expected to be drilled to a total depth of approximately 3,500 m in water depth of approximately 1,000 m. The primary target is an Aptian age, sandstone reservoir.

CGX Energy and Frontera Energy are joint venture partners in these offshore blocks. As a result, Frontera Energy and CGX Energy in April 2021 entered into a term sheet for a $19 million loan that would enable CGX to continue to finance its share of costs related to the Corentyne, Demerara, and Berbice blocks.