Map showing the location of the Kaieteur Block offshore Guyana
United States oil giant ExxonMobil’s local subsidiary announced on Thursday that it has exited the Kaieteur Block offshore Guyana and has since handed over its interest to an Israeli oil
“ExxonMobil Guyana has exited the Kaieteur Block offshore Guyana, with participating interest assigned to Ratio Guyana Limited and Cataleya Energy Limited; Ratio is anticipated to assume the role as operator,” the company said in a statement.
Ratio Guyana Limited is a Tel Aviv, Israel-based energy company that operates in a joint venture with ESSO Guyana Limited, holding 25 per cent of the licence in the Kaieteur Block, which covers an area of approximately 13,535 square kilometres.
As it is, Exxon is the operator of Kaieteur Block with a 35 per cent working interest while Hess holds 20 per cent, Cataleya 20 per cent and Ratio 25 per cent.
Based on international reports, both Exxon and Hess are withdrawing from the licence which means the remaining stakeholders, Ratio and Cataleya, would possibly retain a 50 per cent participating interest each. Permission will have to be sought from the Guyana Government to allow Ratio to be appointed as operator of the block.
At the beginning of 2021, the partnership had announced the Tanager-1 discovery in the Kaieteur Block offshore Guyana, with proven reserves of 65 million barrels of oil.
In addition to Tanager-1, it was previously reported that there was the prospect of additional oil mapped across a 5750 sq km 3D seismic survey. It is located in the southern part of the Kaieteur Block, where the joint venture partners are grading the next potential targets for drilling.
The Kaieteur Petroleum Agreement is currently in the first extension period, which began on February 2, 2021 and lasts for three years.
Last month, it was revealed that former President David Granger had granted a one-year extension to ExxonMobil on its 2016 prospecting licence – a move which has shifted the oil major’s relinquishment timeline.
In the letter, dated July 24, 2020, the then Head of State approved extensions for Exxon’s holdings in the Stabroek, Canje, and Kaieteur Blocks. Based on provisions in that 2016 agreement, when the second renewal period comes up, the license holder would have to relinquish 20 per cent of the block.
According to Exxon in its brief statement on Thursday, “Our exploration efforts and discovery of oil in the Kaieteur Block have highlighted Guyana’s offshore potential. Our withdrawal from the Kaieteur Block has no impact on our commitment to seeking further exploration and development opportunities and to generating additional value for the Government and people of Guyana.”
These opportunities, the US oil company noted, include plans to accelerate development and production in the Stabroek Block, where Exxon is targeting six Floating Production, Storage and Offloading Vessels (FPSOs) by the end of 2027, bringing Guyana’s production capacity to more than one million barrels per day.
Guyana, with ExxonMobil as the operator, began producing oil on December 20, 2019, in the oil-rich Stabroek Block, which 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” FPSO vessels.
ExxonMobil’s 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 bpd.
Earlier this month, Guyana concluded the bid round of its historic oil block auction, receiving 14 offers on eight of the 14 blocks offshore that were put up for auction.
Of the 14 blocks in the auction, three were for deep-sea areas and the other 11 for shallow areas. Offers were made on two deep-sea blocks and six shallow-area blocks.
Among the six bidders are ExxonMobil; 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).
Government said it would now have to conduct evaluations on the bids received, and expected to wrap this process up in early October in order to move on to negotiations and conclude the agreements before the end of this year. (G8)
