Major IOCs throw in bids for Guyana offshore blocks

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Shikema Dey
Experienced Journalist with a demonstrated history of working in the media production industry and a keen interest in oil and gas, energy, public infrastructure, agriculture, social issues, development and the environment.

Guyana’s first licensing round is causing quite a stir with high interest already expressed in the 14 blocks up for grabs. So much so that the government is mulling an extension of the April deadline for submissions to allow other interested bidders to get their proposals in order. 

“A lot of companies have been making requests to us to have an extension because they have to prepare their proposal to send into us so that we may consider, however, it stands at April for now,” explained Minister of Natural Resources, Vickram Bharrat.

According to the Minister, over 20 companies have entered bids, many of those being majors in the industry.

“…but 10 companies actually paid the fee to get into the data room so…those companies we can say safely that we are sure about…in terms of interest, we probably have double that in terms of companies reaching out to us for additional information on the bid round. So, I may not be able to tell you companies by name, but it is some of the major IOCs around the world,” Mr. Bharrat said.

The sizes of the blocks on auction range from 1,000-3,000 square kilometres (sq. km.).

Successful bidders are to pay a minimum signature bonus of US$10 million for each of the 11 shallow water blocks in play. They would pay a minimum of US$20 million for each of the three deepwater blocks up for grabs in the ultra-deep Area C.

The signature bonus is also part of a slew of other terms which characterise the new fiscal regime for Production Sharing Agreements (PSA). The other terms include a 10 % royalty, a 50/50 profit oil sharing between government and contractor, a 10% corporation tax and a 65% cost recovery ceiling.

The round will be open until April 14, 2023. Evaluations and negotiations will follow, with a timeline for awards set in May 2023. Participants will pay a US$20,000 fee that gives them access to the government’s data room.

Click here for more details on the Licensing Round: https://oilnow.gy/glr2022/

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