Even as the COVID 19 pandemic continues to cause significant disruption to global health security and economies, Guyana still continues to attract significant interest in its oil and gas basin. In fact, UK investment firm, Westmount Energy, recently noted that during the March-May 2020 period, exploration drilling did not come to a halt in the Guyana-Suriname Basin as opposed to other territories.
The UK firm which gives companies exposure to investments in offshore blocks was keen to note that there are currently five drillships operating within the basin between development and exploration drilling operations, with four of these drillships operating offshore Guyana. During this era of a pandemic, the company said that this is indeed significant and signals how critical Guyana is to the growth engines of major industry players.
Westmount went on to note the Tanager-1 well was spudded on August 11, 2020 on the Kaieteur block using the Stena Carron drillship, and will be the deepest well drilled in the basin to date, with an estimated target total depth of circa 8,000 metres. It added, “Continuing drilling activity in the basin is likely to be driven by the industry’s focus on ‘advantaged barrels’ as a result of the unique combination of prospect sizes, reservoir quality, low carbon intensity and low breakeven metrics, available offshore Guyana. These characteristics offer the potential to sustain Guyana as an investment growth area in spite of COVID 19 related issues and general industry headwinds.”
Turning its attention to a brief overlook of the industry, Westmount said it is paying rapt attention to the immediate impact of the pandemic on the sector which resulted in a sharp drop in demand for oil. It noted that the reopening of economies has allowed oil prices to recover to around US$40-US$45 per barrel (Brent) from the record lows earlier this year.
Nevertheless, Westmount stressed that uncertainty remains the order of the day as a second wave of the virus has the potential to retard economic recovery through ad hoc travel restrictions, quarantine and local lockdowns. The investment group is hopeful that measures being implemented by nations worldwide will be enough to ‘bridge the gap’ and help find the correct balance while all await the arrival of effective therapeutics and a vaccine.
