Apache Corp. and the French energy major Total said Tuesday they’ve made a significant oil discovery offshore of the small South American nation of Suriname.
The announcement comes after Apache first offered vague results in early December that disappointed investors, and Houston-based Apache then made a 50-50 partnership with Total to eventually hand over the operations to the French firm. In just more than a month, Wall Street sentiments have made an about face on Apache’s Suriname plans with the new joint venture and, now, the first promising results.
Apache has pinned high hopes on Suriname after Exxon Mobil started developing huge oil projects offshore of neighboring Guyana. Apache is quick to point out that it is drilling just seven miles from the Guyana maritime border.
Although Brazil and Venezuela both have many decades of oil experience, energy companies have begun focusing of late on their much smaller neighbors to explore their offshore waters. There’s also more exploration occurring by Colombia.
Apache said it discovered substantial oil volumes at two different depths at the first Suriname test well, called Maka Central-1, and that high pressures underground prevented drilling much deeper than 20,000 feet to test a third interval at about 22,000 feet. But the initial results show additional promise at the deeper geologic depth, called the Turonian, Apache said.
“Preliminary formation evaluation data indicates the potential for prolific oil wells. Additionally, the size of the stratigraphic feature, as defined by 3-D seismic imaging, suggests a substantial resource,” said Apache Chief Executive John Christmann.
The exploration area, known as Block 58, contains about 1.4 million acres.
“We have identified at least seven distinct play types and more than 50 prospects within the thermally mature play fairway. In partnership with Total, we look forward to advancing both exploration and development of discoveries on the block,” Christmann said.
Under the new deal with Total, Apache will serve as the initial operator while Total agreed to pay the Houston company a bonus of $100 million. Total also agreed to pay its share of past costs for the project. After the first three test wells, Total will take over as operator.
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