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The joint venture partners in the Corentyne Block offshore Guyana have discovered oil in a well drilled on the block, but they are not giving assurances that there is enough crude in place to ultimately lead to commercial oil production.
CGX Energy Inc and the Frontera Energy Corporation, partners in the Corentyne Block, this week said in their respective first-quarter results releases that the Wei-1 well on the Corentyne block was successfully drilled and oil was encountered.
“Preliminary indications from the secondary targets in the Maastrichtian and Campanian are positive, however no assurance can be given that these activities will ultimately produce hydrocarbons in commercial quantities,” Frontera Energy said in a statement.
“It is not yet certain that the hydrocarbons encountered to date in the Well are yet sufficient to underpin commercial development on the Northern portion of the Corentyne block,” CGX Energy said in its press release.
The uncertainty of whether the discovery could be commercially viable is a rare setback for explorers offshore Guyana, which has turned into one of the hottest new exploration provinces for many companies, including U.S. supermajor ExxonMobil.
Exxon and its partner Hess Corp have found more than 11 billion barrels of oil equivalent offshore the South American country and have made more than 20 discoveries to date, many of which are large and under development.
Just last week, Exxon said it would go ahead with a $12.7-billion oil development off the coast of Guyana after the country’s government gave its final approval to the project.
Exxon expects Uaru, the fifth project on Guyana’s Stabroek block, to add around 250,000 barrels of daily capacity after a targeted startup in 2026.
Two Floating Production Storage and Offloading (FPSO) vessels, the Liza Destiny and Liza Unity, are currently operating offshore Guyana and produced an average of 375,000 barrels of oil per day in the first quarter. A third FPSO, the Prosperity, is expected to be operational later this year, adding 220,000 barrels of daily capacity from the Payara development, Exxon says.
By Charles Kennedy for Oilprice.com