Apache, Total form Suriname offshore exploration joint venture

Apache and Total announced a joint venture agreement to explore and develop Block 58 offshore Suriname. Everybody in the offshore oil and gas business has heard of the new oil El Dorado- Guyana. Kosmos Energy has again failed to unearth oil at an exploration well offshore Suriname. Offshore oil and gas company Kosmos Energy will begin drilling operations on the Pontoenoe well offshore Suriname during August.

Apache and Total will each hold a 50% working interest in Block 58, which comprises approximately 1.4 million. South America will lead the way in fixing a troubled deepwater drilling market as Petrobras initiates major production projects. Super tug Fairmount Expedition has delivered offshore support vessel Harvey Rover safely in the port of Paramaribo. Apache will operate the first three exploration wells in the block.

George Kirkland, vice chairman says “This agreement enables us to explore for new resources in this frontier basin”.

Chevron Global Energy Inc. Chevron will be assigned a 50 percent working interest in Blocks 42. Atwood Oceanics Pacific Limited has been awarded a contract by a group of companies for work offshore Suriname and Guyana. It including the Maka Central-1 well, and subsequently transfer operatorship to total. The company has completed drilling the Pontoenoe-1 exploration well in Block 42 offshore Suriname.

But that doesn’t mean we haven’t been optimistic on certain deepwater topics. Apache will receive various forms of consideration, including: $5 billion of cash carry on Apache’s first $7.5 billion of appraisal and development capital. The prospect for higher demand for drillships and semisubs in Brazil has always been seen as one of the major catalyst.

25% cash carry on all of Apache’s appraisal and development capital beyond the first $7.5 billion. The Fairmount Expedition was in Trinidad when her assistance was required by the owner of Harvey Rover. Kosmos will have a 50 percent working interest and remain operator of both blocks until the end. Various cash payments in conjunction with closing of the joint venture agreement.

Chevron will assume the remaining 50 percent working interest. The operator group presently consists of Murphy Suriname Oil Company, Ltd, Repsol Exploration S.A. Future production from joint development projects and reimbursement of 50% of all costs incurred to date in Block 58. This is a second dry well in a row drilled by Kosmos off Suriname. US-based Harvey Gulf International facing engine problems the 2010 build.

Apache and Total have also agreed to bear their proportionate working interest share of costs on all future exploration wells. Guyana has been put on the oil and gas map by a series of offshore oil discoveries made by ExxonMobil. 75 meters long Harvey Rover was en route towards Trinidad. The transaction has received all necessary approvals from Suriname and is expected to close within three days.

As for the Pontoenoe-1 well, it was located offshore Suriname approximately 280 kilometers northwest of Paramaribo. Seasoned offshore oil explorers such as Equinor, Kosmos, Apache, and Exxon itself, have acquired acreage in Suriname. Reality can change quickly in the offshore rig market. Fairmount Expedition departed from Trinidad and met with Harvey Rover within four days.

Further details of the terms are outlined on Apache’s website. The companies that have drilled offshore Suriname in the past year or so. Petrobras’ baseline rig requirement to maintain current production is estimated to be around 20 rigs. The blocks are on trend with new deepwater Cretaceous discoveries in the region. Suriname Block 58 presents a unique, large-scale oil resource opportunity.

Patrick Pouyanné, chairman and CEO says “We are very pleased to team up with Apache and Staatsolie, and to become operator of this promising license”.

Company very pleased to welcome total to existing partnership with Staatsolie. It approximately 2,497 meters of water and has been drilled to a total depth of approximately 6,194 meters. Blocks 42 and 45 are located approximately 155 miles from Paramaribo and cover a combined area of approximately 2.8 million gross acres. Total’s extensive offshore operational experience and global footprint make it an ideal partner for a block of this size and potential.

Upon meeting certain drilling commitments, the partnership has the rights to explore the entire block through mid-2026 without acreage relinquishments. Commenting on the Pontoenoe result, Kosmos has said it believes there was evidence of a working source kitchen. This provides for a thorough evaluation of the multiple play types we have identified in this emerging oil-prone basin.

This does not worry Rudolf Elias, the CEO of Suriname’s national oil company Staatolie. It is indeed a unique exploration opportunity in a prolific basin. Apache and total are encouraged by the preliminary information. This year, the number of rigs on contract will drop to 14. The Harvey Rover was delivered safely in Paramaribo just twelve days after Fairmount Expedition’s assistance was required.

Petrobras will need to tender for at least four rigs to maintain 20 rigs. The two upper Cretaceous play types encountered thus far. Staatsolie would probably need to shell out between $500 million and $1.5 billion. The company used the Ensco DS 12 drillship, formerly known as Atwood Achiever, for the work on the Anapai well. Deepening and testing operations continue at Maka Central-1. Following the completion of these activities.

Kosmos holds rights in the Block 42 and Block 45 contract areas under production sharing contracts. The program consists of four (4) wells at an operating dayrate of approximately $115,000. Elias has shared that the number would be around $1.4 billion if an oil discovery is made that is similar to ExxonMobil’s Liza find in Guyana. The well will now be plugged and abandoned and the well results integrated into the ongoing evaluation of the remaining prospectivity.

Kosmos holds rights in the Block 42 contract area under a production sharing contract with the Government. Petrobras says that they plan on drilling 88 oil production wells. The rig is expected to complete its current commitment with Edison International S.p.A. The block ranges in water depth between approximately 2,000 and 2,500 meters. The company fully characterize results of Maka Central-1.

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