While the Stabroek Block has been a shining success story of oil exploration and production, the Canje and Kaieteur Blocks tell a different story. According to Vice President Bharrat Jagdeo, the former is back in the hands of the State and the way forward on the latter is yet to be determined.
During his recent press conference, Vice President Bharrat Jagdeo addressed both the Canje and Kaieteur blocks. The Canje Block was at one point held by ExxonMobil, Total Energies, JHI Associates and Mid Atlantic.
ExxonMobil was previously the operator with 35 per cent shares, while Total also held 35 per cent, JHI Associates held 17.5 per cent and Mid-Atlantic Oil & Gas, Inc. 12.5 per cent. Meanwhile, the Kaieteur block was held by ExxonMobil and Hess, before their withdrawal last year, leaving behind Ratio and Cataleya as the remaining partners.
Like Canje, Exxon was also previously the operator of the Kaieteur Block with a 35 per cent working interest while Hess held 20 per cent, Cataleya held 20 per cent and Ratio, 25 per cent. According to Jagdeo, the Canje block has since returned to the state, while a decision will be taken on Kaieteur sometime in the future.
Vice President Bharrat Jagdeo
“Since then, the Canje block has reverted to the government. Because they didn’t meet their obligations. And the Kaieteur block, there has been some exploration on it. We expect some determination in the future,” Jagdeo said.
Jagdeo also addressed allegations by Alliance For Change (AFC) leader Nigel Hughes, that he was dodging questions regarding the blocks. He made it clear that the process used is the same one followed by the coalition government itself, such as when they provided Ratio with an exploration license.
“Nigel Hughes wants to know quite a bit now. He wants me to answer for that. I looked into it. I wasn’t in government. And I found out it followed the same principle we always had, that Trotman employed in 2016, when he gave, I think it was an exploration license to Ratio.”
“The same terms he gave in the exploration license to Ratio. Nothing changed from the last agreement Ramotar gave out,” the Vice President said.
Jagdeo pointed out that the People’s Progressive Party/Civic (PPP/C) Government is the first one in Guyana’s history to go to public auction for the sale of oil blocks. This ensures that everyone gets a fair opportunity to bid for the oil blocks.
The government is planning a second such auction, after the success of last year’s auction. Among those awarded oil blocks during that bid round was a Guyanese female-led company, Sispro Inc., which received a shallow block (S3) and a deep-water block (D2).
The Canje 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), which got Block S4; Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited, which got Block S7, and International Group Investment Inc. of Nigeria, which got two blocks – S5 and S10.
Another shallow block, S8, was awarded to the Stabroek Block partners – ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited. The second deep-water block – D1 – was awarded to Delcorp Inc. Guyana, which comprises Watad Energy and Communications Limited and Arabian Drilling Company of Saudi Arabia.
The auction was launched back in December 2022 and closed off in September 2023. In total, there were 14 offers made on those blocks – including two for deep-sea blocks and six for shallow-area blocks.
Last month, it was announced that the Government of Guyana had concluded negotiations on the new Production Sharing Agreement (PSA) with six companies looking to commence oil exploration soon. The companies will occupy a total of eight oil blocks.
Unlike the 2016 oil contract signed between the ExxonMobil-led co-venturers and the then A Partnership for National Unity/Alliance For Change (APNU/AFC) Coalition, the new agreement outlines an increase in royalty from two per cent to 10 per cent, a 65 per cent cost recovery as opposed to the previous 75 per cent, and the retention of the 50-50 profit-sharing.
