ExxonMobil, operator of the Stabroek Block offshore Guyana, has surpassed its work programme as outlined in the Production Sharing Agreement (PSA) it has with the South American county, by leaps and bounds.
According to the provisions of the 2016 PSA, Article 4 – Exploration Programme and Expenditure Obligation states that during the first four years of the permit—June 2016 to June 2020—The Contractor shall within the initial period complete the interpretation of any 3D seismic acquired in respect of the Contract Area and complete the drilling of a minimum of one exploration well.
At the end of the initial period of four years, the contractor can elect either to relinquish the entire Contract Area or renew the Petroleum Prospecting Licence for a further period of up to three years, that is to say, up to June 2023. During that timeframe, Exxon has to drill one exploration well.
At the end of the first renewal period of three years, the company can elect to either relinquish the entire Contract Area or renew the Petroleum Prospecting Licence for a second period of three years, lasting until June 2026. For that period, the oil company has to drill one well.
By 2026, it has to return the entire block to the State, save and except for portions already in production or where a discovery has been made. The subject minister, according to the PSA, has the power to allow the company and its co-venturers to hold the block for much longer if good cause can be provided.
To date, Exxon has made over 30 discoveries at the Stabroek Block amounting to nearly 11 billion oil equivalent barrels. The company has two projects producing oil and two more already approved. Plans are also underway for a fifth project. Exxon has said it envisions around 10 floating production storage and offloading units being in operation offshore Guyana in the coming years.
Exxon’s strategy of testing deeper targets at Stabroek Block delivering big results | OilNOW
While no portion of the Stabroek Block would be available for an auction until 2026, the Government of Guyana has said that it will be aggressively pursuing the relinquishment of several other oil blocks, while noting that acreage offshore will be the focal point for now.
Like Guyana, Trinidad going after relinquishment of oil blocks
OilNOW understands that relinquished portions for offshore blocks will come from Canje and Kaieteur which are both operated by Exxon, Demerara and Corentyne operated by CGX Resources and Frontera Energy Corporation, and the Kanuku which is operated by Repsol.
Rystad Energy, an independent energy research and business intelligence company also weighed in on the upcoming bid round as it noted that the country is expected to include about 26,800 square kilometers of deepwater offshore acreage.
While previous rounds were awarded after direct negotiations, Rystad commented briefly that interested explorers must this time be prepared to bid against each other for a chance to join Guyana’s oil success story.
