Exxon among 6 bidders for 8 of 14 remaining oil blocks offshore Guyana

As the auction of the remaining 14 oil blocks ended on Tuesday, ExxonMobil is one of six oil companies that submitted bids, according to a well-placed Government source.
The other companies are SISPRO INC (Guyana); Total Energies EP Guyana BV; Qatar Energy International E&P LLC; Petronas E&P Overseas Ventures SDN BHD (Malaysia); Delcorp Inc Guyana and Watad Energy and Arabian Drillers of Saudi Arabia; Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited; International Group Investment Inc and Montego Energy SA (London).
While the bids have been received, the awarding of the oil blocks will be done by the end of the year.
Some 14 oil blocks were up for tender – 11 in the shallow area and three in the deep-sea area. The sizes of the oil blocks on auction range from 1000 to 3000 square kilometres (sq km).
Auctioning of the blocks had previously been pushed back, as the Government had signalled its intentions to improve the sector’s regulatory framework before potential investors put in their final bids.
When the deadline was extended in July, the Ministry of Natural Resources had released a statement saying that “industry feedback and the advanced pace of modernising the oil and gas regulatory framework underscore the extended bidding period for the nation’s first competitive offshore oil and gas licensing round.”
They further said that “the round, officially launched on December 9, 2022, continues to receive strong global interest, and the Government has benefited from insightful feedback during the consultation periods of the Indicative Terms and Guidelines and the draft model Production Sharing Agreements.”
Vice President Bharrat Jagdeo during his press conference had stated that when the auction wraps up, evaluations and negotiations will follow before the blocks can be awarded. The Vice President had previously indicated that there were several areas remaining offshore that were not put up to be auctioned off in the current exercise.
Under new conditions, Guyana stands to benefit from signature bonuses as high as US$20 million for the deep-water blocks and US$10 million for the shallow-water blocks. Additionally, all future Production Sharing Agreements (PSAs) will also include the retention of the 50-50 profit-sharing after cost recovery; the increase of the royalty from a mere two per cent to a 10 per cent fixed rate; the imposition of a 10 per cent corporate tax, and the lowering of the cost recovery ceiling to 65 per cent from 75 per cent.
Guyana, with US oil giant ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being held in the Natural Resource Fund (NRF) at the New York Federal Reserve Bank, where it is earning interest.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), holds 45 per cent interest in the block. Hess Guyana Exploration Ltd holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
Since last year, Guyana has been recording weekly lifts in the Stabroek Block with oil production now at 340,000 barrels per day (bpd) from the Liza Destiny and Liza Unity floating production, storage and offloading (FPSO) vessels. With EEPGL making weekly lifts, Guyana’s crude entitlement of one million barrels occurs monthly from the two FPSOs.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. Production has already started in the second phase, with the Liza Unity FPSO vessel in operation.
The third project – the Payara development – will target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.
Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will target a mammoth 250,000 barrels per day (bpd).