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How heavy is it ? Why no API figure ? How much sulfur ? Why no percentage ?
Ask yourself why the Bentley heavy crude field in the North Sea is still not developed ......
A project has to have a good IRR......if the oil is crap and the IRR is low, nobody will invest in it to develop it. Why do you think TLW are so negative on it.
Are you 12? So you think that they will go ahead with production if they earn little profit? Look at other fields before writing garbage.. take our previous numbers and apply a discount of around $10 to the sell price and add $10 to the costs.. with jethro channel & hammerhead alone at $2 pb we are worth around $250m.. US refineries need heavy oil and in a lot of cases pay full price and even premiums.. Light oil represents less headache but heavy oil can still be very profitable
You say 9 different profitable scenarios......
...................but how many of those have a good return on them. if you have to spend 5 billion over 10 years to make 5 billion and 100 pounds profit......you made a profit, the return on investment is not compelling. But yes, its profitable.
Lots of flowery diversion and deflection going on.
Its all about Carapa now, they are trying to tread water until that result.
Very high risk - Carapa is good with light oil - saves the day.
Carapa is bad and the share price will suffer devastation - down to maybe 30 million market cap, which is around 17p a share.
You pay your money, you take your chance.
I would watch out for pumping of Namibia now, if suddenly lots of focus goes on promoting those assets then they are getting ready for further bad news ahead.
Good luck to holders - I might buy in on any Carapa success, but certainly not at the moment considering the potential massive drop if Carapa fails.
Market smelt sulphurous rat
Wow?
WOW........that explains why they are hiding it. Very high sulfur content, thats the killer, not worth developing and not commercial. Not just high............Very High.
https://www.spglobal.com/platts/es/market-insights/latest-news/oil/111319-tullows-shares-tumble-after-guyana-find-shown-to-contain-heavy-crude
A Tullow representative confirmed that laboratory results of the oil at the Jethro-1 and Joe-1 wells indicated that the specific gravity was as heavy 10-15 API and of very high sulfur content.
.
Gil deliverately decided not to talk about the info on the API.
Regards
Fernan
It was already mentioned in the interview that there are still 9 different profitable scenarios.. increased costs won’t play a major part in the decision.. it will all come down to the final results on the flow etc
In the case of Kraken, I remember that the operator (Enquest PLC) made the FID I think in 2013, in times of US$ 100 oil.
I don´t know if a similar project will be developed in a US$ 60 oil.
Regards
Fernan
Scroll down about two thirds for a table of the Venuzalean extra heavy oils:
https://www.eia.gov/beta/international/analysis_includes/countries_long/Venezuela/background.htm
"Orinoco tar sand is the most common unconventional crude oil produced in Venezuela. Typical qualities for Venezuelan unconventional crude oils are 5°-15° API gravity, 4-6 wt% sulphur and 1-2 wt% nitrogen. There are also conventionally produced heavy crude oils (for instance, Ku-Maloob-Zap) that are very similar in quality to unconventional heavy crudes."
"Options for producing and distributing these heavy crude oils vary, including:
• Selling directly to refineries that can handle less than 10° API crude oils
• Blending with a lighter crude or upgrading to create a crude with 20°-25° API, “Maya Crude Equivalent” to be processed at existing high-conversion refineries
• Blending with a lighter crude or upgrading to create a higher-?quality, sweet 30°-40°+ API crude oil that many refineries can ?handle
• Produce high-quality finished products in the same crude upgrading facility."
https://www.digitalrefining.com/article/1000563,Challenges_of_heavy_crude_processing.html#.XcxRKldKjIU
I understand that Gil made a direct comparison with the Mariner, Kraken and Peregrino projects, because all of them are offshore and with a similar API grade.
Regards
Fernan
10-20 api I think. Venezuela are one of the top oil producing nations in the world - about 2.25m bbl /pd I think
definitely a demand for it
Hi Fernan10,
Thanks for this comparator. Did Gil not also reference Venezuela (our nearest geographic if not necessarily geological analogue) and the (positive) price effect on demand for 'heavy' from Venezuela-calibrated US Coastal refiners ?
If so, could you include info re Venezuela API, if to hand ?
Thanks and ATB
35k bopd at kraken I think with peak 50k bopd - that will do!
Mariner is low API and lower reservoir temp than Jethro https://www.spe-uk.org/aberdeen/knowledgefiles/SPE_Aberdeen_Mariner-250913-%20Final.pdf
sulper content is a tricky one but I believe the technology does exist
Gil mencioned today that they have analyzed the commerciality of 3 similar projects:
Kraken (North Sea): 14 API
Mariner (North Sea): 12-14 API
Peregrino (Brazil): 13 API
Those projects were selected undoubtedly because all of them have similar API to Jethro and Joe.
Regards
Fernan
If it’s API as low as in the 10-15 API range that is a massive blow and I think it’s a disgrace Eco didn’t release that info in the RNS this morning but instead benchmarked it to the likes of Gulf Mexico where Maya crude has a much more manageable 22 API
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/111319-tullows-shares-tumble-after-guyana-find-shown-to-contain-heavy-crude
A Tullow representative confirmed that laboratory results of the oil at the Jethro-1 and Joe-1 wells indicated that the specific gravity was as heavy 10-15 API and of very high sulfur content.
The API is very similar to the extra-heavy crude from Venezuela's Orinoco belt and the tar sands from Canada's Alberta province.
Oil of this quality can be very hard to extract, making it tough to commercialize at current oil prices, and this oil generally trades at a significant discount to global crude benchmarks.
Tullow CEO Paul McDade, however, said the company remains confident of the broader light oil potential of the other blocks in Guyana: Orinduik and Kanuku.
It is currently drilling the Carapa well, targeting Cretaceous play in the Kanuku block.