Guyana to experience ‘massive' oil exploration this year
…as territorial disputes head for resolution
February 5, 2007
GUYANA and Suriname recently began proceedings in a Washington DC tribunal over territory, including their maritime border and about 15,600 square kilometers that is currently Guyanese, writes Gareth Chetwynd.
The Case is being heard before the permanent Court of Arbitration under the UN Convention on the Law of the Sea (UNCLOS). Guyana filed for Binding arbitration proceedings under the UNCLOS Treaty. Proceedings began in 2004 after unsuccessful efforts to negotiate a settlement following the gunboat incident involving Canada's CGX.
The Arbitration proceedings were recognized by Suriname and are expected to result in demarcation of the maritime border. Oral representations were being held behind closed doors at the Organization of American States and were expected to last until December 20.
Ministers from both countries have insisted their arguments will prevail, while Guyana's Geology and Mines Commission (GGMC) predicted a ‘massive' increase in oil prospecting and drilling once the border dispute with Suriname is resolved.
Acting GGMC Commissioner, William Woolford, is quoted as saying that CGX plans to restart prospection work on its offshore prospects before the end of 2007. ExxonMobil is looking to revive exploration of Guyana as some of the heat goes out of territorial disputes involving neighboring countries Venezuela and Suriname.
The super-major has a large off-shore exploration position on Guyana's Stabroek block covering about 60,000 square kilometers in water depths ranging from 600 feet to 10,000 feet, but exploration plans were put on hold when territorial disputes flared up at the start of the decade.
A dispute with eastern neighbour Suriname dragged the territorial issue into the international spotlight in 2000.
A jack-up rig leased by CGX of Canada was forced off its location by gunboats from the Surinamese navy, interrupting drilling operations that had been authorised by the Guyana Government.
Venezuelan claims have also contributed to the near paralysis of exploration activities in Guyana. Venezuela has never formally abandoned 19th Century claims to a swathe of territory west of the Essequibo River, representing more than 60 per cent of Guyana's territory.
The dispute flared up when Guyana unveiled plans to allow a US company to operate a rocket base in the region. Venezuela responded by threatening to offer exploration concessions in the disputed area.
Relations with Venezuela have improved since then and Venezuelan President Hugo Chavez has signaled that his administration will not oppose a future move by Guyana to grant oil concessions in the Essequibo region.
Guyana was among the Caribbean nations that recently backed Venezuela's unsuccessful bid for a non-permanent seat on the UN Security Council.
Hopes for a settlement to the Surinamese dispute have also improved since 2004 when a UN tribunal was established to handle the issue. Arbitration proceedings are currently gathering pace.
The Stabroek permit has been under force majeure for several years, but ExxonMobil recently stepped up talks with Guyanese authorities and intensified the process of evaluating the area within the context of its exploration portfolio.
The acreage includes a large area on the eastern side of Venezuela's gas-prone Plataforma Deltana region. “We are talking about how we can move forward and maybe do some seismic acquisition,” said Bill Drennen, Vice President for the Americas with ExxonMobil's exploration company.
Drennen acknowledged significant obstacles as Guyana resolves problems involving its eastern and western borders, but remained cautiously optimistic.
“There are still some areas that are sufficiently in the middle to be far enough away from these disputes, offering a more comfortable position,” he said, without giving a likely timetable.
ExxonMobil retains a 100 per cent interest on its Guyana Block, although it is understood that the company has received some approaches.
Spain's Repsol YPF is among the potential suitors and has plans to drill two exploration wells next year in Suriname's off-shore Block 30.