Oil blocks’ auction: Evaluation of bids likely to wrap up this week – VP Jagdeo

With the aim of signing the contracts by year-end, Vice President Bharrat Jagdeo on Thursday revealed that the evaluation of the 14 bids received for the remaining oil blocks offshore Guyana could wrap up as early as next week.
Following its launch in December 2022, the bidding round closed off in September with six companies bidding on eight of the 14 blocks offshore that were up for grabs. In total, there were 14 offers made on those blocks.
Last month, the Government said the evaluation of those bids would finish in early October with the aim of concluding the agreements before the end of the year.
During his press conference on Thursday, VP Jagdeo was asked about the progress of the evaluation and disclosed that, “They were supposed to finish this by next week.”

According to the Vice President, he is confident that they will be able to meet these timelines set out.
“When the timelines were developed, they were developed in discussions with our consultants. So, I guess there is adequate time in that timeline to complete all of this. I can’t tell you definitively now because if it gets more complex in the negotiations or if there is slippage… But I anticipate that this would happen [that is, it would be] completed within a timeline,” Jagdeo stated.
Of the 14 blocks in the auction, three were for deep-sea areas and the other 11 for shallow areas, ranging from 1000 to 3000 square kilometres (sq km). Offers were made on two deep-sea blocks and six shallow-area blocks.
VP Jagdeo previously said that there were no offers for the following blocks: D3, S1, S2, S6, S9, and S11. This effectively means that bids were received on the D1 and D2 blocks in the deep-sea area while for the shallow area, on the S3, S4, S5, S7, S8 and S10.
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).
Meanwhile, for the six blocks that received no offers along with the other remaining blocks offshore, President Dr Irfaan Ali had hinted one day after the September 12, 2023 closure of the auction that these could be available for government-to-government deals.
The Head of State also expressed satisfaction with the results of the bid round, noting that it is in keeping with Government’s commitment to an open public and transparent process in awarding the remaining blocks offshore Guyana.
Similar sentiments were driven home by VP Jagdeo despite some questioning the success of the bid round.
The 2016 oil contract for the Stabroek Block signed between the ExxonMobil-led co-venturers and the then APNU/AFC coalition Government has been heavily criticised for low royalty, lack of ring-fencing provisions, and cost oil claims that will see Guyana losing billions, among other issues.
For these new potential oil deals stemming from the auction, the current PPP/C Government has established a new Production Sharing Agreement (PSA). Under new conditions, Guyana stands to benefit from as high as US$20 million signature bonus for the deep-water blocks and US$10 million for the shallow-water blocks. Additionally, while it includes the retention of the 50-50 profit-sharing after cost recovery, there is an increase of the royalty from a mere two per cent to now 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 the previous 75 per cent.
Guyana, with ExxonMobil as the operator, began producing oil in December 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 some 400,000 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.
The third project – the Payara development, which comes on stream later this year – will add another 220,000 bpd when production regulates in a few months after start-up. Payara 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 the US oil giant’s fourth development in Guyana’s waters, will target a mammoth 250,000 bpd during a 20-year period that will generate at least 1300 direct jobs. This project is slated to commence production in 2025 using the “One Guyana” FPSO vessel.