Govt begins with ExxonMobil process of 20% relinquishment of oil-rich Stabroek block

The Guyana Government has commenced the process that would see United States oil major ExxonMobil relinquishing 20 per cent of the oil-rich Stabroek Block offshore Guyana.
This is according to Natural Resources Minister Vickram Bharrat, who disclosed during a recent mid-year press conference that the technical teams from his ministry have already started engaging ExxonMobil – which, along with its co-venturers, is operating the Stabroek Block – on the relinquishment to be done later this year.

“The [prospecting licence] renewal is up on the 7th October for the Stabroek Block… So, our teams have already started working with Exxon to ensure that we work out the relinquishment of 20 per cent of the Stabroek Block,” Bharrat stated last week.
The 2016 oil contract for the Stabroek Block, signed between ExxonMobil and the then A Partnership for National Unity/Alliance For Change (APNU/AFC) Administration, stipulates the relinquishment of 20 per cent of the acreage in the Stabroek block not held by discoveries.
“So, it is not 20 per cent of the entire Stabroek Block… The relinquishment clause states that it excludes production areas [and] appraisal areas too. Those areas must be excluded. And then, you know, there is an area being affected because of the [border controversy] issue with Venezuela too. So, our team is working out the acreage that will remain after [those exclusions], and then 20 per cent (of) that will have to be relinquished, and (it) comes back to the state… So, that is on stream for October, when Exxon will seek a renewal [of the Stabroek Block prospecting licence],” the Natural Resources Minister explained.
Located approximately 120 miles offshore Guyana, the 6.6 million-acre Stabroek Block holds over 11.6 billion oil-equivalent barrels of light sweet crude. Production activities have been ongoing since December 2019, and exploration activities continue in the prolific block offshore Guyana. To date, over 30 oil discoveries have been made in the Stabroek Block, with latest crude find recorded in March at the Bluefin well.
Currently, there are three floating, production, storage and offloading (FPSOs) vessels – the Liza Destiny from the Liza Phase One Project, Liza Unity from the Liza Phase Two Project, and Prosperity from the Payara Project – producing oil offshore Guyana at a combined rate of just over 640,000 barrels per day.
Two other projects, the Yellowtail and Uaru, are expected to come on stream in 2025 and 2026 respectively, and would further ramp up the country’s production.
As the operator of the block, ExxonMobil’s local affiliate ExxonMobil Guyana Limited holds a majority 45 per cent interest, while Hess Guyana Exploration Ltd has 30 per cent interest, and CNOOC Petroleum Guyana Limited holds the remaining 25 per cent interest in the Stabroek Block.
These three FPSOs in the Stabroek Block are projected to realise crude oil production of over 550,000 barrels per day in 2024, with an expected ramp up to over 600,000 in the latter part of this year.
Back in May, President of ExxonMobil Guyana, Alistair Routledge, told reporters during a press conference, “We have a good idea, but we haven’t finalised that. And obviously we have to work with the Government on the calculation of what the 20 per cent represents; and then the identification of the acreage, and then the Government confirming that it is aligning with the obligations of the contract.”
This Stabroek Block relinquishment was due since 2023, but the US oil giant had secured a one-year extension, until October 2024, from the previous Coalition Government after the force majeure was applied during the COVID-19 pandemic that resulted in lost time.
Force majeure is a French legal term meaning the occurrence of circumstances beyond control that prevent the fulfilment of a contract.
Since last year, Vice President Dr Bharrat Jagdeo had indicated Government’s intention to put the relinquished areas back on the market. He had said that the 20 per cent acreage would be placed in the country’s second bidding round that was initially slated for this year end.
However, during a press conference in July, Jagdeo said Government is not in a rush to hold its second auction of the oil blocks offshore.
“We have time on our side, because it’s not like we are in any rush to go out to the second auction. If there was like a timeline set for the second auction, we had to bring this [first auction] to a close by a particular time,” the Vice President had explained.
Last week, it was disclosed that Government has concluded negotiations on the new Production Sharing Agreement (PSA) with the six companies that were awarded oil blocks during the inaugural 2022-2023 licensing round.
Minister Bharrat revealed during last Wednesday’s press conference that the oil contracts are expected to be signed soon, and all the awardees have indicated that they are ready to pay the signing bonus.
Among those awarded oil blocks during the bid round was a Guyanese female-led company, Sispro Inc, which received a shallow block and a deep-water block. Other shallow blocks were awarded to Total Energies EP Guyana BV in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas Ventures SDN BHD (Malaysia); Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited, and International Group Investment Inc of Nigeria, which also got two shallow blocks.
Another shallow block was awarded to the Stabroek Block partners – ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited. While the second deep-water block was awarded to Delcorp Inc Guyana, which comprises Watad Energy and Communications Limited and Arabian Drilling Company of Saudi Arabia.
Meanwhile, Government is now in the process of securing a firm to conduct a 3D seismic study of the country’s Exclusive Economic Zone (EEZ) offshore. Once completed, this would provide the Government and potential buyers with access to high-quality seismic data for effective evaluation during future bidding and licensing rounds.