Monday, September 26, 2022

Around one-third of Guyana’s offshore acreage could be up for grabs in new bid round

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Guyana is set to auction off portions of its offshore oil basin – dubbed the world’s hottest offshore play, before the end of 2022.

A map of the Guyana Basin (dated August 17) shows that almost a third of the acreage remains unlicensed; those could be up for grabs at the new bid round. And the possibility exists for the acreage to increase if conditions of relinquishment are added to the new open areas.

ExxonMobil currently holds the most offshore blocks – Stabroek, Kaieteur and Canje. At 6.6 million acres, Stabroek is the largest block in the basin. Exxon has a 45% stake in Stabroek and 35% each in Kaieteur and Canje Blocks.

There is also the Roraima Block, operated by Occidental Petroleum along with the Kanuku and Orinduik Blocks operated by Spanish multi-national Repsol and the Africa-focused Tullow Oil respectively.

There are also the Demerara and Corentyne Blocks operated by CGX Energy and the Berbice Block operated by ON Energy – a CGX subsidiary.

Guyanese should have a chance to participate in oil blocks auction – Vice President | OilNOW

Both the Demerara and Berbice Blocks will be included in the auction, according to Vice President Dr. Bharrat Jagdeo, since they were both relinquished by CGX in principle. This agreement to relinquish the Blocks is yet to be enacted, so they remain unlicensed on the books.

There is also the Oreo Block and Block C; both are unlicensed.

Anticipation has been growing for the auction because of Exxon’s remarkable success in the Stabroek Block; with close to 11 billion barrels of oil equivalent discovered and even more expected as it rolls out its aggressive exploration campaign.

Block C has garnered the most though, a concession which stretches 2.3 million acres (9600 Km2). And it is anticipated that equal interest will be had in the relinquished portions of the Canje and Orinduik blocks.

The government is working swiftly to determine the fiscal terms to ensure balanced benefits to the parties involved. This may delay the oil block auction, Vice President Dr. Bharrat Jagdeo said recently.

He said the issue is “contentious” since the government has faced some criticism for its decision not to renegotiate the Stabroek Production Sharing Agreement (PSA) terms. Some say the contract is not favourable to Guyana, and while the administration agrees with some criticisms, it says contract sanctity is important and that the Stabroek Block partners will keep incentives necessary to facilitate the aggressive development of the discovered resource.

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