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Latin America with Eni and Repsol, is currently devel- costly offshore drilling oping its offshore Perla gas feld, which The right technology to explore and • has been reported to contain reserves of develop the area’s unique basin make-up • up to 16 Tcf of natural gas in the Cardon A sound and consistent investment

IV block in the Gulf of Venezuela. model of the host county “The model has to be open, transpar-

The Santos Basin is estimated to con- ent and fair. It has to give companies an tain a mean of 62.3 Tcf of undiscovered acceptable rate of return for them to take gas, and the Falklands Basin is estimated a risk, either geologically or politically,” to contain a mean of 39 Tcf, Schenk said. he said. “Companies are going to invest “The resources in these areas are where the geology is proven, but they will strictly related to the geological history of also look at where they have a high proba- these areas,” Schenk said, referring to the bility of being able to get an acceptable rate rifting period when South America broke of return over a long period of time – 10 to apart from Africa during the Mesozoic 25 years. They need to invest in a country era and created rift basins, salt deposits with a proven track record – not one that and the deposition of other sediments, changes its policies every fve years, or soil and rocks. “It’s all geology, really, when the price of oil goes up says, ‘We when you come down to it.” don’t need you anymore. Go home.’”

Historically, common deal-breakers

The right shovel

Although the geology may be present for have included: • lucrative discoveries, politics can some- Changing royalty agreements • times trump science, leaving valuable Upping concessions yet still requiring resources in the ground, Piñon said. third party investors to act as operators

Raising taxes on produced oil, among “Those resources have zero value under- • other assets ground,” he said. “You need a shovel – the

Increasing local content requirements • right shovel – to get them out.”

For Piñon, that shovel contains four – often creating a bottleneck in countries important parts: that lack the technology to explore and

Oil prices of a minimum of $70/bbl for exploit a play •

It has been widely reported conventional oil •

A vast amount of capital to invest in that assets of ExxonMobil and

Pleistocene eolianite on the coast of Cancun, Quintana Roo, Mexico.

Photo by Christopher Schenk of the US Geological Survey.

drilling has been done there.” being tapped out – containing a means The North Cuba Basin of the of 14.7 and 59.7 billion bo undiscovered, Greater Antilles Deformed Belt respectively. also holds promise with an

Hiding in the shadows is the under- estimated mean of 4.7 billion bo explored Guyana-Suriname Basin off undiscovered.

Although Colombia is most the north coast of South America and known for its onshore resources, estimated to contain a healthy mean of an estimated mean of 2.4 Tcf of 13.6 billion bo. It is trailed by another undiscovered natural gas lies underexplored basin, the Falklands, with in the Guajira Basin, Schenk an estimated mean of 5.3 billion bo. added. “A lot of companies feel “All along we’ve been saying there is that oil is more economical than potential in the Falklands,” Schenk said, gas, but gas is becoming more likening the basin to offshore French economical around the world.”

Guiana, which went underexplored for years until 2011 when Tullow Oil Venezuela, in partnership announced a discovery of 236ft of net oil pay from its Zaedyus exploration well.

Locations of 10 priority geologic

The virtually untouched Salado-Punta provinces of Mexico, Guatemala, and Belize assessed in 2012 by del Este Basin, which is farther south the US Geological Survey for down the Brazilian coast and does not undiscovered, conventional oil contain salt structures, is estimated to con- and gas resources. tain a mean of 2 billion bo undiscovered.

Courtesy of the US Geological Survey.

“It has potential,” Schenk said. “Very little oedigital.com April 2015 | OE 63 000_OE0415_Geofocus1_Heather.indd 63 3/23/15 2:42 PM