French oil company Total’s proposed farm-in into an offshore oil block in Guyana has received approval from the country’s president David Granger.
The news was shared on Wednesday by Eco Atlantic, an oil and gas company whose 25% stake in the Orinduik offshore block will be transferred to Total.
In September 2017, Total paid $1.0 million paid to Eco for an option to farm into a 25% working interest in Orinduik upon delivery of processed 3D data from the 2,550 km2 survey shot on the block by Eco and its operating partner Tullow (60%).
Total in September exercised its right to acquire the 25% WI from Eco, and with government approval now having been received for the transfer, Total will now pay Eco an additional $12.5 million cash consideration in accordance with the option. The cash will provide Eco with the means to fund a part of the drilling program that will be carried out in the block in 2019.
Following the formal completion of the transaction, the WI on the Block will be: Tullow – 60% (Operator) Total – 25% Eco – 15%
Gil Holzman, Chief Executive Officer of Eco, commented: “We are very glad to be able to move ahead so effectively and swiftly in Guyana, significantly ahead of our committed licence schedule. We are thankful to the Guyana authorities and the honourable President for their approval to allow us to bring Total into the block. Eco’s team brought Orinduik to the table prior to the first ExxonMobil Liza discovery, deeming the block to be a high-graded opportunity, selected from multiple basins we had researched and evaluated around the world.”
“We are delighted to see Orinduik maturing into what has the potential to be a large-scale field. Following the joint signature of the Petroleum Agreement with Tullow, and now with Total’s Option exercise, our belief in the prospectivity of the Block and our strategy to partner with world class oil companies is only strengthened. We look forward to drilling at least one well on Orinduik alongside our partners in 2019. With the USD$12.5m that we will now receive from Total, and together with our current strong cash position we are fully funded for our drilling programme.”
A competent persons report (CPR) on Tullow Oil’s Orinduik block offshore Guyana recently identified 2,9 billion barrels of oil equivalent of P50 (best estimate) reserves. Eco Atlantic in September said that the first-ever CPR on the Orinduik block was prepared by Gustavson Associates LLC. The company added that the 2,9 billion boe were identified across a total of ten leads.