| 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 |
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| 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 |
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| 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) |
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| 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 |
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| Commercial Discovery | Notice of commercial discovery due by or before 180 days prior to end of Appraisal or Retention Period Else, relinquish discovery area |
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| 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 Development Plan shall be accompanied by Environmental Impact Assessment Plan |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| 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 |
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| Profit Sharing | 50/50 | |
| Taxation and Royalty | 10% Royalty 10% Corporate Tax (Corporate Tax Act to be amended) |
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| 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% |
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| 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 |
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| 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. |
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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.Â
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 |
