Tullow promises strong local content policy should wells be successful

…says small, medium-scale local companies to be included in development phase

By Jarryl Bryan

With Tullow and its partners making preparations to drill three wells this year, local content and jobs in the sector will be a concern for many. According to the British company, it will be collaborating as closely as possible with locals should oil be discovered and development start.
This was according to Tullow’s Head of Communications, George Cazenove, who in an exclusive interview with Guyana Times explained that the company has a positive track record in local content.
“Tullow is a company that is mostly based in Africa and we have huge experience of oil development in Africa, particularly in Ghana and also in Kenya and Uganda… we are very committed to a way of working we call shared prosperity,” Cazenove explained.
“Shared prosperity includes a firm commitment to local content… Tullow has made significant efforts in both East and West Africa to make sure that local companies, particularly small and medium-sized enterprises, are involved in the supply chain in the oil and gas developments we are involved with.”
Cazenove noted that in the current exploration phase the company is in with its Orinduik block, it’s difficult for small and medium-sized companies to take part due to the need for technical expertise. But he added that the Government would naturally expect that Tullow do as much as it can to advance local content opportunities for the Guyanese people to directly benefit.
“But during the development phase, if we have success, we will certainly seek to include small and medium-sized Guyanese companies as much as we can,” Cazenove explained to this publication.
When it comes to the potential for that success, Cazenove expressed the need for caution due to the unpredictable nature of oil exploration. Notwithstanding the success of relatively nearby wells like Exxon’s Hammerhead prospect, Cazenove noted that the wells Jethro-Lobe, Joe and Carapa still carry an element of risk.
“We’re delighted to be working in Guyana. We’re very excited about the drilling programme ahead of us. We’re hopeful that the wells will be successful. But I would add that caution… they are risky wells. There’s no guarantee of success. As I said earlier, there’s a one in four chance of successful campaign.”
“The Hammerhead well is definitely of interest to Tullow and its partners. It’s certainly helped in de-risking some of the geology. But you can’t read too much into anything. You have to be very careful that you don’t see one prospect and then read across too far into others. It’s exciting. It gives us huge interest, but we’re very cautious. Exploration is a risky game and we don’t take anything for granted.”

2019 plans
Tullow had in February announced it was bringing forward its drilling programme from the previously scheduled end of the year to the second quarter. It had announced that the Jethro prospect would be drilled in June.
On the other hand, its Carapa prospect in Kanuku will be drilled in the third quarter. It is understood that the net cost of the Jethro well is US$30 million, while the Carapa well will cost US$20 million.
Tullow’s partner in the Orinduik block, Eco Atlantic, had announced that drilling on the Joe prospect will begin in mid-July of this year. They had announced that the Stena forth drill ship will move directly to the Joe, after it finishes drilling the Jethro Lobe Well in the Orinduik block.
It is understood that the Joe is located in approximately 650 meters of water and will cost Eco approximately US$3 million to drill. A recently published report from international company Gustavson Associates has estimated that the well has a 43.2 per cent chance of success.
The Orinduik oil block is just a few kilometres from Exxon’s discoveries in the Liza and Payara fields. It is under the administration of Eco Guyana and Tullow, who signed a 10-year Petroleum Prospecting licence and Production Sharing Agreement with the Guyana in 2016 French firm Total E&P Activities Petrolieres entered the fray in 2017; partnering with Eco with the option to get a 25 per cent share in the block.