French oil major Total has exercised its option to acquire a 25 percent working interest in the Orinduik block offshore Guyana after a competent persons report identified potential for almost three billion barrels of oil equivalent.
Eco Atlantic, a partner in the Tullow-operated Orinduik block, said on Thursday that Total E&P Activités Pétrolières, a wholly-owned subsidiary of Total, exercised its option to acquire a 25% working interest in the block from Eco Atlantic.
Total decided to exercise the option following a competent persons report (CPR) announced on Tuesday. According to the CPR, the Orinduik block could potentially hold 2,9 billion barrels of oil equivalent of P50 (best estimate) reserves identified across a total of 10 leads.
Eco added that the option was exercised before delivery of the final 3D seismic data due to be delivered to Total, which would have triggered a 120-day exercise window for the option.
The option does not effect Tullow which will remain the operator and hold down its 60 percent of working interest. Following the option exercise and the receipt of all requisite regulatory approvals, Total will hold 25 percent while Eco’s interest will decrease from 40 to 15 percent.
In accordance with the terms of the option, Total will pay a fee of $12.5m to the company on receipt of all requisite approvals for the transfer of the 25 percent interest. Eco added that the payment would provide adequate funding to meet Eco’s share of the costs to drill at least two wells on the block as well as recover the costs of the completed 3D seismic survey.
Gil Holzman, CEO of Eco, said: “We are absolutely delighted that Total, one of the world’s largest oil companies, has so quickly chosen to exercise its option to acquire a 25 percent stake in our Orinduik Block to gain further exposure to offshore Guyana, currently one of the most exciting exploration areas globally.
“With Tullow as operator and the technical contribution that both Total and Eco now bring to the project, we look forward to working with these two world-class players in further progressing the exciting exploration of the Orinduik Block.”
Colin Kinley, COO of Eco, added: “Total entering the blocks four months earlier than anticipated is welcomed as they add significant technical horsepower to the interpretation and now bring them into the planning for drilling. Tullow announced last week drilling is anticipated early the third quarter of 2019.”