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July 16, 2012
After some success ... safety concerns stop Jaguar-1 partners from oil drilling
Guyana Chronicle

Gov't  supports halt - engaging CGX, Repsol and Tullow

THE oil companies involved in drilling Jaguar-1 well, 107 miles away from the city in the Georgetown Block near the border with Suriname, announced yesterday, that they had stopped operations due to safety considerations.

They discontinued the exploration at a depth of 4,867 meters, approximately 75 percent of the targeted 6,477 meters, which had been stated before the spud in February and the abandoned hole is to be capped, officials said.

The decision to stop, at this point, was unanimously agreed to by all partners after it was found that the safe pressure design limits at the site were in danger of being exceeded.

Those involved in the partnership, of which Jaguar-1 is a part, are Repsol Exploración S.A. (15%), as operator; YPF Guyana Limited (30 percent); Tullow Oil plc (30 percent) and CGX Resources Inc. (25 percent).

An official of Tullow said that the well, which was being drilled for five months, was prevented from going deeper because it could not handle the high levels of pressure encountered.

It was a “high pressure, high temperature” type, the same as BP's which caused an explosion in the Gulf of Mexico in 2010 and led to the worst offshore oil spill in U.S. history, he said.

A CGX official said that whilst the primary ‘late cretaceous’ geologic zone was not reached, samples of light oil were, successfully, recovered from two turbidite sands.

CEO President Kerry Sully said: “Based on hydrocarbons recovered during the drilling of Jaguar-1, CGX is confident that a new well, targeting the same prospect would hold significant promise and is, therefore, committed to seek a re-drill, utilising a new well design."

Commenting on his company's plans in the Guyana/Suriname Basin, CGX Chairman Dr. Suresh Narine reiterated the near term goals of CGX, stating: “In addition to our commitment well on the Corentyne Block, we are planning a 3D seismic programme, later this year, with our ultimate goal being to commit to a rig for a three to five wells programme.”

“Added to this, would be the re-drill of the Late Cretaceous target addressed by the Jaguar-1 well,” Dr. Narine explained.

Gov't Supports Halt

Meanwhile, the government yesterday said it is in full support of the decision by local oil explorers Tullow, Repsol and CGX Energy Incorporated to halt its drilling activities in face of safety concerns.

The Ministry of Natural Resources and the Environment, in a release, said Government accepts the consortium’s decision to close operations, safety being the primary consideration after it was officially informed on Sunday.
The drilling of Jaguar #1 was estimated to be completed in approximately six months and progress with the well was steady. However, down-hole conditions became very challenging and despite the resort to technical and engineering solutions by the consortium, Government accepts the consortium’s decision to close operations, safety being the primary consideration.

“The Guyana Geology and Mines Commission has been mandated to work with all related parties on a full analysis and determinations from information gathered so far. But evidence of petroleum occurrences was encountered, which were encouraging to all the parties,” the ministry said.

It said Government and operator for the consortium, Repsol, continue to be engaged on the way forward, which could include a second well to achieve the intended objective of the Jaguar #1. “These discussions have started as it is our intention to see an early restart of early exploration drilling by all the approved parties,” the ministry stated.

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