Oil blocks’ auction: Govt looking to conclude evaluation of 14 offers in October – VP Jagdeo

…bids submitted for 2 deep-sea, 6 shallow blocks

Vice President Bharrat Jagdeo

With 14 offers by six bidders for eight of the 14 oil blocks offshore Guyana, the Government is aiming to wrap up evaluation of those bids next month.
This is according to Vice President Bharrat Jagdeo during his weekly press conference on Friday.
Following its launch in December 2022, the bid-round closed off on Tuesday with six companies bidding for eight of the 14 blocks offshore Guyana that were up for grabs.
According to Jagdeo, Government is “very pleased” with the 14 offers that have been received from the six bidders.
“Some of the blocks are very competitive (with 14 offers from six bidders on the eight blocks),” the Vice President noted.
Of the 14 blocks on auction, three were for deep-sea areas and the other 11 were 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 disclosed on Thursday that there were no offers for the following blocks: D3, S1, S2, S6, S9, and S11. This effectively means that bids were received for the D1 and D2 blocks in the deep-sea area, while bids were received for the shallow area, on the S3, S4, S5, S7, S8 and S10.

The 14 blocks offshore Guyana that featured in the recently concluded bid-round

Among the 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).
“We have to now allow the process to work. The evaluation would be done. We’re anticipating in early October to finish the evaluation and then to move on to discussions to conclude the agreements before the end of the year,” Jagdeo told reporters.
Meanwhile, in regard to the six blocks that received no offers along with the other remaining blocks offshore, President Dr Irfaan Ali hinted on Wednesday 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 for an open, public and transparent process in awarding the remaining blocks offshore Guyana.
Similar sentiments were driven home by VP Jagdeo on Thursday, despite some questioning the success of the bid-round.
“I’m very happy about it, given all the fiscal changes we made… When you change fiscal terms [on oil contracts], it can spook people, but I think, given the overwhelming success here and the discovery rates, a lot of these bidders are excited about the prospects, as we are,” he stressed.
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 deals, 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 arrangement 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 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 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 would 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. It 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. (G8)