Negotiations with the winners of Guyana’s first bid round are set to begin next week, according to the country’s Minister of Natural Resources, Vickram Bharrat.
Bharrat said the government has officially notified the awardees of the eight blocks. “We have already written to all of the companies, or the awardees, in the eight blocks, and those negotiations will begin very shortly,” Bharrat stated, pointing to early next week.
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He reiterated that one of the primary criteria for awardees is their ability to pay the signing bonus.
“Shallow [blocks] is a minimum of US$10 million for the exploration license, and [deepwater blocks] is a minimum of US$20 million for the exploration license,” Bharrat stated. Additionally, the companies must have the resources and commitment to adhere to their proposed work programs. “We are going to hold them to that work program,” he said.
He stressed an urgency for exploration activities to commence promptly after blocks are awarded. “We want exploration activities because it is through exploration activities that opportunities can come to our local private sector and our people,” Bharrat stated.
Vice President Dr. Bharrat Jagdeo had said there is a need for due diligence and the protection of the government’s interests during these negotiations. “We’ll start [negotiations] in earnest… but I don’t want to put pressure on our people,” he had stated, highlighting the importance of a thorough and balanced approach to the upcoming talks.
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There were concerns regarding the flexibility of the terms of Guyana’s model petroleum agreement. Jagdeo warned that talks could falter if the winning bidders seek overly substantial changes. “We are not going to weaken the [production sharing agreement] to suit ExxonMobil… If they do not want to sign it, fine,” Jagdeo had said, noting that ExxonMobil had found some aspects of the current production-sharing agreement too stringent.
The Vice President had said the government is open to minor amendments, but major terms related to transparency and accountability will remain unchanged. In the event of breakdowns in negotiations, the government is prepared to engage the next most responsive bidder.
