APA says Baja oil discovery in Suriname is first find on Block 53

APA Corp. has made an oil discovery offshore Suriname at the Baja-1 well in the country's Block 53, its first on that block along the coast of the South American country, the company said Aug. 23.

The Baja-1 well found 112 feet of net oil pay in a single interval within the Campanian interval, a shallower subsurface zone as opposed to the deeper Santonian zone that some of APA's other Suriname discoveries have involved, the company, formerly known as Apache Corp., said in a statement.

Baja-1 was drilled to a depth of 17,356 feet in water depths of about 3,740 feet, APA said. Preliminary fluid and log analysis suggests light oil with a gas-oil ratio of 1.6-2.2 Mcf/b, in a good-quality reservoir, the company added.

The Baja-1 discovery is a downdip lobe in the same depositional system as the recent Krabdagu discovery made last February, located 11.5 km to the west in Block 58 where APA and that block's operator TotalEnergies have made five discoveries.

"Our success at Baja marks the sixth oil discovery we have participated in offshore Suriname, and the first on Block 53," John Christmann, APA CEO and president, said. "This result confirms our geologic model for the Campanian in the area and helps to de-risk other prospects in the southern portion of both Blocks 53 and 58."

Most of the early excitement in Suriname had been around the potential of Block 58, Matt Andre, Platts Analytics manager for energy analysis–production, said.

Block 53 find 'adds to optimism'

"But a discovery in Block 53 just adds to the optimism" for the country's offshore acreage, Andre said. "And since the company's Dikkop exploration well in Block 58 has been plugged and abandoned, now [APA has] more options with the discovery in Block 53."

Apache operates Block 53 with 45% working interest. Malaysia's Petronas holds a 30% stake while Spain's CEPSA has 25%.

Evaluation of the well's logs, cores and reservoir fluids continues, APA said.

Now that discoveries have been made on two adjacent Suriname APA blocks, investment bank Tudor Pickering Holt said it is "looking for more on testing and disclosure regarding the potential connectivity" between them.

Analyses of the logs, cores and reservoir fluids "will have us looking for APA's commentary on future capital allocation within Suriname across the blocks, given the regulatory approval the company has received regarding the PSC terms and options to extend the exploration period by up to four years," TPH said in its Aug. 23 daily investor note.

APA also said it recently received regulatory approval amending the Block 53 Production Sharing Contract that provides options to extend the PSC's exploration period by up to four years. The company said it is currently formalizing election of the first one-year extension and that all work commitments on it are completed.

Next drill: Awari prospect

After current operations at Baja-1 are completed, the drillship used to drill that well will move to Block 58 where it will drill the Awari exploration prospect, about 17 miles north of the Maka discovery.

Block 58 is adjacent to Guyana's Staebroek Block where nearly 30 discoveries have been made since May 2015. Two of those are producing a total of roughly 360,000 b/d of oil. A third is slated to start up in late 2023 and a fourth development was recently sanctioned and will start up in 2025.

APA also said it has finished operations at the Dikkop exploration well in Block 58. The well encountered water-bearing sandstones in the targeted interval and was plugged and abandoned.

TotalEnergies operates Block 58 with 50% interest, and APA holds the remaining 50% stake. Another drillship will move to the Sapakara field to drill a second appraisal well at Sapakara South, where the partners conducted a successful flow test in late 2022.

"We think this keeps APA and its partners progressing toward FID, but that could be a 2023 event" rather than later this year, since the Sapakara appraisal results may not be known until later in the year, RBC Capital Markets analyst Scott Hanold said in an Aug. 23 investor note.