Vice President Dr. Bharrat Jagdeo said Thursday that companies interested in Guyana’s offshore licensing round will not be deterred by its postponement. He recently announced a one-month postponement to facilitate the update of Guyana’s outdated oil laws.
“We have enormous credibility – we’re one of the hottest spots in the world, so the other [countries] who are in the auction process, and over 80 of them, I don’t think they have the record of discoveries like Guyana,” Jagdeo said.
Secondly, he explained that government has reached out to companies that expressed interest, so they are apprised of the postponement and reasons for doing so. Companies that have expressed interest include supermajors Shell and Chevron.
Jagdeo said the companies appreciate that the government is sticking to its commitment to ensure they have a predictable framework in which they would be bidding.
“Many countries don’t do that, they have an opaque framework, and then they keep changing things all the time and it doesn’t lend to investors’ confidence. So, I think they appreciate that we’re sticking with our commitment, which is a new [model petroleum agreement] and a new law so they can study both before they put in their final offer,” the Vice President stated.
Two versions of the petroleum agreement have been prepared for different blocks: deep water and shallow water. These drafts have already incorporated comments received and are currently undergoing further policy review. They will be finalised after the passage of the law.
The new proposed law was released on June 19, commencing a two-week period of consultation. The Petroleum Activities Bill is expected to repeal and replace the current Petroleum (Exploration & Production) Act, which has been in place for three and a half decades.
With 14 blocks open for auction, estimated to contain approximately 25 billion oil-equivalent barrels, Guyana is pushing for major expansion of exploration beyond the Stabroek Block.
