October 25, 2011 / 7:44 PM / in 6 years

French Guiana find seen as Latam oil "game-changer"

* Analysts believe could herald big new offshore oil area     * Hopes that northeast South America “mirrors” West Africa     By Pascal Fletcher     MIAMI, Oct 25 (Reuters) - A recent oil discovery off French Guiana on South America’s northeast shoulder is a potential “game changer” for the region, boosting hopes it can replicate West Africa’s oil bonanza, experts said on Tuesday.     Speakers at a Latin American oil and gas conference in Miami made a point of highlighting the deepwater find announced last month by London-based explorer Tullow Oil (TLW.L) in its offshore Zaedyus well in the French overseas territory. [ID:nL3E7K90WB]     Excitement about the Zaedyus oil strike has been magnified by the fact that Tullow has made major discoveries across the Atlantic off Ghana in West Africa’s Gulf of Guinea and believes the geology there is replicated in northeast South America.     This “mirror image” theory is based on the view that Tullow’s Ghana and French Guiana finds are tapping into the same ancient rock formations laid before Africa and South America separated millions of years ago.     “We have potentially another world class (oil producing) province in Latin America” said Alirio Parra, a former Venezuelan oil minister and director and senior associate of the CWC group, which organized the oil and gas conference.     “The two pieces fit almost perfectly,” Parra added.     RoseAnne Franco, an upstream research analyst with Wood Mackenzie, said the fact Tullow was citing six additional prospects off French Guiana with a similar make-up to Zaedyus suggested major potential in the coastal area extending from Guyana through offshore Suriname and French Guiana and into northeast Brazil’s maritime area.     “It’s a potential game-changer -- in the sense of the size, that you have an area with such immense prospects,” Franco told Reuters after speaking at the conference.     Oil exploration had been carried out previously off Suriname and Guyana, but this had been relatively limited.     “So I think there’s still uncertainty, but what you see under way in offshore French Guiana would suggest that the Equatorial Margin has enormous prospects,” Franco added, referring to the new deepwater exploration frontier that focuses on northeast Brazil.     In the past decade, fields with tens of billions of barrels of oil have been found offshore Brazil in reservoirs that were formed when Africa and South America were attached.     Parra said the French Guiana discovery came amid increasing exploration activity in Latin America, when governments were looking to expand their energy resources and were finding a willing investment partner in commodities-hungry China.     “Asia is looking for energy security. Latin America is looking for energy markets,” Wood Mackenzie’s Franco said.     The Zaedyus well in French Guiana was drilled in more than 2,000 metres of water and at a cost of some $200 million,     Tullow was operating the Guyane Maritime license with a 27.5 percent stake along with partners Royal Dutch Shell Plc (RDSa.L), with 45 percent and France’s Total (TOTF.PA) with 25 percent. Northpet -- a company owned by Northern Petroleum and Wessex Exploration -- has a 2.5 percent holding.     Europe’s largest listed explorer by market capitalization, Tullow had plans to drill exploration wells too in neighboring Suriname and Guyana.     “Moving forward, I think interest is going to heighten substantially,” Franco said, adding she believed the offshore French Guiana oil find had been under-reported so far.  (Editing by Sofina Mirza-Reid)

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