Total said that it has expanded its footprint in South America by investment in offshore blocks near Guyana, according to a new report by UPI.
The contracts, which the French company recently signed, will give it a non-controlling stake in the Canje, Kanuku, and Orinduik offshore blocks.
"Total is very pleased with this significant entry in the prolific Guyana basin," E&P President Arnaud Breuillac said in a statement. "The Canje, Kanuku and Orinduik blocks are located in a very favorable petroleum context, evidenced by the Liza discovery in 2015."
ExxonMobil and Tullow Oil already held stakes in the blocks, which are located in the Guyana Suriname basin - estimated to hold up to 12 billion barrels of oil.
A floating production, storage, and offloading vessel (FPSO) would be required for some parts of the 120,000-barrel per day project, UPI reported.
Last month, ExxonMobil's drilling team found 230 feet of high-quality, oil-bearing reservoir just outside the Liza phase one project, according to a newswire by Dow Jones. This new announcement constituted the company's sixth since an initial find in 2015.
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The American major's Guyanese subsidiary, Esso Exploration and Production Guyana Ltd., began drilling the Ranger-1 well northwest of Liza back in November. Production is expected to begin by 2020, less than five years after discovery of the field.
Pumping from offshore Guyana is slated to be lucrative. Low-cost shale projects in Texas' Permian Basin attracted $7 billion in new investments just from Exxon in early 2017, but experts have said the Guyanese project could be "just as attractive and competitive at the Permian." Analysts expect a 33 percent internal rate of return, a two-year payback term, and profit margins of $32 a barrel, according to figures from BMO Capital seen by Seeking Alpha.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
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