The recent discovery on the Orinduik Block by Tullow Oil is a significant development in Guyana’s history and has now introduced another player into the game. In fact, the discovery of oil at the Jethro-1 well is momentous for Guyana since it crystallises the variety of geological petroleum plays within the basin, says Oil and Gas Academic and Consultant, Charles Ramson.
During an exclusive interview with the Guyana Standard, the attorney-at-law noted that most of the Stabroek Block oil finds have been in the Cretaceous structures except for one, the Hammerhead discovery, which has been in the Tertiary play.
Ramson said, “.mJethro is in the Tertiary play and in another block which confirms that we have a wide spectrum of geological petroleum plays and increases our appeal on the world stage as one of the most prospective petroleum basins in the world.”
Further, the Oil Academic said it rebalances Guyana’s fortunes from an international oil company perspective, in that it is not just one operator marking up all the success offshore Guyana. He said, too, that Total being one of the partners in the Orinduik block, which struck black gold, helps to augment its interest in Guyana. Ramson noted that Total is one of the international oil majors with a strong track record and global reputation for oil production, while noting that its presence in the market will be to the nation’s benefit.
Additionally, Ramson said that having Total as part of a de-risked offshore concession is going to be beneficial since its other partner on the block, Eco Atlantic, was never an operator and would more than likely farm down as early as possible.
Significantly, the lawyer posited that the discovery emphasises the need for Guyana to get its Petroleum Commission and Local Content Legislation in order.
He also bemoaned the fact that the fiscal terms of the Orinduik Production Sharing Agreement (PSA) are only marginally better than those which Exxon received. He reminded that the Orinduik PSA was signed in 2016, which was long after Exxon’s Liza discovery in April 2015 and, as such, the terms should have been better.
According to the PSA, Guyana stands to get a 1% royalty while receiving as much as 60% in profit oil, depending on the recoverable costs. No signing bonus was received for this PSA that was signed between the Orinduik partners and the APNU+AFC administration.