Since 2015, more than 12 billion oil-equivalent barrels have been discovered in the prolific Stabroek Block of the Guyana-Suriname basin. This proven reserve supports the plans of ExxonMobil, Hess and CNOOC to place 7-10 floating production, storage and offloading (FPSO) vessels in the Stabroek Block. The exploration story at this acreage is one of the best and most unprecedented in the history of the petroleum industry. Now, to encourage a ramp-up of exploration outside of Stabroek, Guyana’s first ever offshore licensing round is underway. Guyana has placed 14 blocks on auction; three deepwater blocks and 11 shallow water blocks. Authorities estimate 25 billion oil-equivalent barrels are at stake. 

Map shows the 14 blocks up for grabs in Guyana’s offshore licensing round

Terms Shallow water Deep water
Exploration Period Initial period of three years
Optional renewal to second phase (two years)
Initial period of three years
Three renewal periods (3, 2, 2 years)
Relinquishment Relinquish 50% at end of first Relinquish 50% at end of first and second phase
Minimum Exploration Work and Budget First Phase: Geological, geophysical data acquisition and studies
Second Phase: Additional studies + one exploration well

NOTE: Work under Appraisal Programme not considered in respect of minimum exploration work

First Phase: Geological, geophysical data acquisition and studies
Second Phase: Additional studies + one exploration well
Third Phase: One exploration well
Fourth Phase (Optional): One exploration well
NOTE: Work under Appraisal Programme not considered in respect of minimum exploration work
Annual Work Programmes and Budgets Due Annually, including abandonment
Applicable to Exploration, Appraisal, Retention, Development
Subject to Minister’s approval
Discovery Notice Notice of Discovery due within 30 days of rig release
Eligible for extension for 40 days
Technical report due within 30 days of notice, else contractor loses all rights to reservoirs
Notice of Potential Commercial Interest due within 105 days from Discovery Notice, or surrender discovery area
Retention Period (For discoveries not of potential commercial interest, but may be within 5 years of discovery date) Initial period of three years
Renewal period of two years
(Annual holding fee of US$2M)
Appraisal Period To be carried out within 30 months, eligible for amendment at Minister’s discretion
Proposed Appraisal Programme due within 30 days of Notice of Potential Commercial Interest
Comprehensive Report due within 180 days after expiration of Appraisal Period
Commercial Discovery Notice of commercial discovery due by or before 180 days prior to end of Appraisal or Retention Period
Else, relinquish discovery area
Development Oil field – initial production period of 20 years
Natural Gas field – initial production period of 30 years
Both eligible for renewal of up to 10 years

Application for production license and proposed development plan due 120 days before expiration of Appraisal Period
Else, Minister may direct that the license ceases to have effect with respect to Development Area

Development Plan shall be accompanied by Environmental Impact Assessment Plan

Associated Gas Priority use is for production enhancement
Contractor to conduct feasibility study for utilisation of excess gas, up to 2 years after submission of development plan
If excess gas has commercial value, Contractor required to further invest to utilise it
If Contractor opts not to utilise excess gas, Minister may elect to take gas free of charge
If Minister takes gas, he shall bear sole risk and expense for infrastructure and handling
Unitisation To govern unitisation of reservoirs straddling multiple contract areas, or a contract area and an open area for the purpose of development
Notice due to Minister within 60 days of identification of shared reservoir
Minister may within 60 days direct contractor to propose unitisation of reservoir. In absence of this, the Minister establishes terms for unitisation
Disposal of Production Minister may request Contractor to market his crude entitlement, with costs
Minister may elect to receive lifting entitlement of natural gas in cash, in which case, contractor shall purchase Minister’s share of gas at market terms
Domestic Supply Obligation Contractor may be obliged to sell crude domestically if market needs (to produce refined products, petrochemicals, power generation) exceed Minister’s total crude entitlement in Guyana
Contractor may similarly be obliged to sell natural gas domestically (for uses such as power generation, LNG for export or for feedstock for other exports, such as methanol and fertiliser
Title to Assets Facilities and Infrastructure All purchased assets become property of Minister upon recovery of costs
Assignment Non-operator must have minimum 5% interest
Operator must have minimum 35% interest
Assignments carry US$2M fee
Financial Guarantees Contractor provides financial guarantee of 20% of expense commitment per work programme or period, and US$5M for other obligations
Failure by Contractor to fulfill work commitments allows Minister to demand payment remaining outstanding amount of guarantee
Parent company to provide undertaking to provide all technical and financial resources to meet Contractor’s obligations
Contractor provides bank guarantee for 100% of abandonment and restoration costs
Liability, Indemnification, Insurance Liability joint and several for Contractor parties
Minister and Government of Guyana harmless against all claims, losses and damages resulting from petroleum operations
Conractor’s work to be insured in-keeping with best practices
License Rental US$1M annually during exploration period
Training of Government Personnel and Budget US$1M annually
Corporate Social Responsibility US$1M due annually to support environmental and social projects
Signature Bonus Minimum US$10M
Not Cost Recoverable
Minimum US$20M
Not Cost Recoverable
Cost Recovery Ceiling of 65% of total production from contract area, less petroleum used for operations
Statements due monthly, quarterly and annually
Profit Sharing 50/50
Taxation and Royalty 10% Royalty
10% Corporate Tax (Corporate Tax Act to be amended)
Import Duties 10% Excise Tax on fuel imports
Abandonment Abandonment Fund to be established
Minister may access in case Contractor fails to properly abandon facilities at termination of agreement
Contractor shall initiate contributions to Fund when cumulative production from field reaches 50%
Audits Audits to be completed within 24 months of relevant Contract Year
Minister gives Contractor audit report within 90 days of completion
Contractor has 90 days to respond to findings
Parties may negotiate in good faith to meet settlement
Stabilisation If new laws or taxes affect Contractor’s economic benefits, parties shall negotiate to modify agreement to restore economic balance
Stabilisation provisions do not apply to industrial and environmental safety of operations, social and environmental protection, occupational health and safety, labour relations, local content, and climate change.

Schedule of Events

Event Date
Publication of indicative terms and guidelines Dec 9, 2022
Publication of Notice with blocks for tender and participation free on Official Gazette Dec 9, 2022
Opening of Data Room Dec 12, 2022
Start of process for expression of interest and payment of participation fee Dec 12, 2022
Consultation period on indicative terms and guidelines Dec 12, 2022 – Jan 31, 2023
Release of draft model contract Mar 14, 2023
Consultation period on model contract Feb 14-28 2023
Publication of final terms of reference and model contract Apr 2023
Submission of bids Sept 12, 2023
Evaluation of bids Sept 18 – Oct 6, 2023
Negotiation Oct 10-27, 2023
Award of contracts Nov 1, 2023

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