The Guyana-Suriname Basin: Competitive Landscape In An Emerging New Petroleum Province

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Includes: APA, APC, CEO, CGXEF, CRNZF, CVX, ECAOF, EQNR, FECCF, HES, KOS, MUR, NBL, PNADF, RDS.A, RDS.B, REPYF, TOT, TUWLF, XOM
by: Laurentian Research
Summary

A right-holding dataset has been built concerning the E&P companies with an interest in the Guyana-Suriname Basin in order to shed light on the competitive landscape therein.

Country-by-country snapshots of the dataset are presented here, showing which companies are present where and how much net acreage they held in the basin.

The right-holders in the basin are compared in terms of net acreage in the basin.

Competitive landscape in the Guyana-Suriname Basin, the hottest offshore petroleum province now.

If you know the enemy and know yourself, you need not to fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” - Sun Tzu, The Art of War

Previously, I discussed the emergence of the Guyana-Suriname Basin as the hottest offshore petroleum province (see here). The discovery of giant oil fields by Exxon Mobil (XOM) and partners Hess (HES) and Nexen (CEO) is followed by an oil rush in the basin, with dozens of E&P companies scrambling to establish a position there.

In this article, let's take a closer look at the competitive landscape in the basin to understand which companies are present in the basin with a working interest and how much acreage each of them holds, such that we can lay a foundation for future discussions on which stocks we as security investors can pick so as to profit from the rise of this frontier.

Right holding

A dataset of all E&P companies with a working interest in any contract blocks in offshore Guyana, Suriname, and French Guiana has been compiled to build a whole picture of the right-holding situation in that part of the world. The dataset, complete with detailed information as to the operatorship, working interest partition, acreage, and data source, and to be updated regularly, can be downloaded by TNRH members.

Below are a few snapshots extracted from the dataset.

Guyana

There are a total of 14 E&P companies holding 8 offshore and one transitional zone blocks (i.e., the Berbice Block of CGX Energy (OTCPK:CGXEF))(Table 1; Fig. 1).

Fig. 1. A map showing offshore contract blocks in the Guyana-Suriname Basin, the serial numbers of which are as shown in Table 1 and 2. Source.

Table 1. A list of companies with assets in offshore Guyana. Note *, CGX owns 62% of ON Energy, which wholly owns the Berbice Block.

Except for Anadarko Petroleum (APC), which could not continue any exploration work in the Roraima Block in the aftermath of the arrest and subsequent release of the seismic survey vessel by Venezuela citing maritime territorial dispute (see here and here), Exxon Mobil holds the largest contract area net to its working interest, followed by:

  • Hess, CGX Energy, Nexen
  • Total (TOT), Frontera Energy (OTC:FECCF), Israel-listed Ratio Petroleum (RTPT.TLV), local private company Cataleya Energy Limited, Tullow Oil (OTCPK:TUWLF), Repsol (OTCQX:REPYF)
  • Local private company Mid-Atlantic Oil & Gas Inc., and Eco Atlantic Oil & Gas Ltd. (OTC:ECAOF).

The blocks surrounding Exxon Mobil's 12 discoveries, e.g., Orinduik, Kanuku, Corentyne, and Canje on the Guyanese side and Block 42, 45, 48, 53, 58, 59, and 42 on the Suriname side, have drawn an incredible amount of interest.

Suriname

Excluding the state company Staatsolie, Suriname offshore attracted a total of 18 E&P companies, collectively exploring a total area of 74,215 sq. km. Cairn Energy (OTC:CRNZF) and Equinor (EQNR) - which used to go by Statoil - holds the largest net area, followed by:

  • Tullow Oil (which also had a considerable presence in Guyana), Apache Corp. (APA)
  • Hess, Malaysian state company Petronas (OTC:PNADF), Kosmos Energy (KOS), Chevron (CVX), Exxon Mobil
  • RWE DEA (now part of L1 Energy), Noble Energy (NBL), Murphy Oil (MUR)
  • Spanish company CEPSA, Pluspetrol, and Ratio Petroleum (Table 2; Fig. 1)

Table 2. A list of companies with assets in offshore Suriname and French Guiana.

Fig. 2. The right-holding situation in the Guyana-Suriname Basin, in relation to the source kitchens. Source.

Now that major breakthroughs had been made over the western half of the source kitchen of the Guyana-Suriname Basin, the expectation is high that a similar extent of success can be attained over the eastern half on the Suriname side (Fig. 2). At least the play types on the Suriname side are similar to those reported on the Guyana side, according to Staatsolie (Fig. 3).

Fig. 3. Maps showing offshore plays (left) and blocks (right) in Suriname. Sources: Here and here.

French Guiana

Total reportedly applied for an extension so that it can hold on to the Guyane Maritime License (see here and here), after Shell (RDS.A, RDS.B) (45%) and Tullow (27.5%) had exited following the disappointing appraisal results of the Zaedyus discovery (see here and here)(Fig. 4). Hague and London Oil said it had acquired the interest of Northern Petroleum and obtained a 7.5% interest (see here).

Fig. 4. The Guyane Maritime License off French Guiana, shown with prospects and the Zaedyus discovery. Source.

Investor takeaways

Solely judging from the total net area held in the basin, there appear to be the following pace groups active in the Guyana-Suriname Basin:

  • The leading group, including Exxon Mobil and Hess, which are poised to parlay their newly acquired local know-how to the rest of the basin, and Equinor, Cairn, and Tullow, which are eager to repeat their success in West Africa in this new frontier;
  • The rest of the cohort, which is a mixture of early entrants, e.g., CGX, Eco, and Repsol, and those that rushed in after the Liza discovery (Table 3);

Table 3. The net area positions (in square kilometers) of E&P companies in the Guyana-Suriname Basin. The author's calculation based on data compiled from press releases and financial reports of various companies.

Such a brief summary of the competitive landscape in the Guyana-Suriname Basin is supposed to lay a foundation for stock picking. To that end, one may need to examine further, for each specific company, some additional factors, such as:

  • The quality of its net area to be assessed based on an understanding of the regional geology and petroleum systems;
  • Its exposure to the so-far proven play types; and
  • Whether an oil discovery in the basin can move the needle for the investors.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.