Tullow Oil strikes dust near one of South America's biggest prizes

Oct. 27 (UPI) -- Explorer Tullow Oil said it was confident about the broader region, but had no luck in a frontier effort near one of the largest finds in South America.

Tullow Oil said it found no significant reserves in its Araku-1 well in the deep waters off the coast of Suriname. Tullow was drilling a wildcat well, one tapping an area not previously known to contain hydrocarbons.

Exploration Director Angus McCoss said the well was drilled efficiently and at a "very low" operational cost.

"While we have not made a commercial discovery, we are encouraged by recovering gas condensate from the well and remain fully committed to exploration in Suriname and Guyana," he said in a statement. "Tullow continues to pursue the considerable prospectivity and potential of this large license and the wider region."

Hess Corp. this week shed more than $2 billion from its portfolio to help develop its Liza prospect off the coast of Guyana. The companies put the reserve estimate for the broader area offshore Guyana as high as 2.75 billion barrels of oil equivalent, 10 percent higher than initially thought. Hess said earlier this year that Liza has "attractive" economics with oil prices as low as $40 per barrel, nearly $20 per barrel less than the current price.

The broader Guyana−Suriname basin is estimated to hold around 12 billion barrels of oil.

Tullow, which has its headquarters in London, posted a loss of around $519 million for the first half of the year, after taking a pre-tax profit of $24 million during the same period last year. First-half production of around 81,400 barrels of oil equivalent per day was in line with its expectations.