UPDATE 1-Tullow says no commercial oil found at second Guiana well

Tue Dec 4, 2012 6:56am EST

Related Topics

LONDON Dec 4 (Reuters) - British explorer Tullow Oil said on Tuesday the Zaedyus-2 appraisal well in French Guiana had not found any commercial hydrocarbons, dampening hopes of a large new oil field offshore the South American country.

The well, located 5km from the Zaedyus-1 well where oil was struck last year, found oil shows but nothing commercial, Tullow said.

Shares in Tullow fell 5 percent to 1,300 pence at 1146 GMT, making it the biggest FTSE 100 faller.

Tullow said reservoirs at the location were not connected to Zaedyus-1 and that the result had no bearing on the bulk of the area yet to be drilled, however.

"The French Guiana block remains highly prospective, particularly down-dip, and still offers excellent potential for multiple exploration successes," Tullow said in a statement.

Tullow has exploration rights to large swathes of territory offshore French Guiana, Suriname and Guyana, hoping to replicate its success in finding big fields offshore West Africa.

The company believes the regions have shared geology stemming from when Africa and South America were connected many millions of years ago.

Tullow has a 27.5 percent stake in the Guyane Maritime licence and is partnered by Royal Dutch Shell, which holds 45 percent, and Total with 25 percent.

A joint venture between smallcaps Northern Petroleum and Wessex Exploration owns 2.5 percent. Northern Petroleum shares fell 14 percent on Tuesday, while Wessex was down 23 percent.

FILED UNDER: