“Small difference” in the Stabroek block relinquishment – VP Jagdeo

As the Guyana Government and ExxonMobil work to iron out the holdings to be relinquished in the oil-rich Stabroek Block, there has been a difference in the areas that the United States (US) oil major is expected to return to the state.
This is according to Vice President Dr Bharrat Jagdeo during a press conference on Thursday, where he disclosed that ExxonMobil Guyana is on track to relinquish 20 per cent of the Stabroek Block this month as stipulated in the Production Sharing Agreement (PSA) it signed with Guyana.
However, the Vice President explained that based on the formula that is outlined in the oil contract, the Ministry of Natural Resources has found a difference in the acreage that the oil company has to give up.

“So, there is a specific amount of [area to be relinquished] because there is a formula on how it’s applied… So, the Ministry has applied the formula [and] they have a small difference in the number… We believe they should relinquish ‘x’ amount and then we’d have someone study again whether they have to relinquish additional amounts based on compliance with that formula. But they have to meet the relinquishment deadline,” Jagdeo stated.
Only two weeks ago, President of ExxonMobil Guyana, Alistair Routledge, told reporters at a press conference in Georgetown that the company is currently engaged in discussions with the Natural Resources Ministry and the Guyana Geology and Mines Commission (GGMC) to finalise which areas it will be giving up.
“We’ve been working very closely with the Ministry of Natural Resources and (with the) GGMC to ensure the proper rules as part of the petroleum agreement are being followed; that we’re clear about what is the accessible acreage within the block, and what areas should be set aside; because they’re already on the production licence of the discovery area, and (they) define what is the area to be relinquished. I’d say we’re almost complete on that process, and I anticipate it will be completed very soon,” Routledge explained.
At the time, however, Routledge had declined to comment on which areas the company was looking at relinquishing.

Meanwhile, the oil executive also spoke about the Kaieteur block, which the company was supposed to have exited and handed over to Ratio Guyana Limited.
At a press conference last month, Vice President Bharrat Jagdeo had said the Government was awaiting information from Exxon in order to finalize their departure from Kaieteur. Routledge acknowledged that there is an ongoing exchange of information between Exxon and the Government, and said the company would look to supply the requested data as soon as possible.
“For the Kaieteur block, we addressed the data requests, the document requests, the Government had for us. Again, as with the work on the renewal of the prospecting licence for Stabroek, there are points where we receive more data requests or document requests, and we go back and forth… And we plan to submit those (answers) as quickly and as timely as we can. Some of it requires us going to the other participants in that block, particularly Ratio, as they are coming in as the operator,” he further explained.
It was announced last year that Exxon and Hess were both withdrawing from the Kaieteur block after years of fruitless exploration, which Exxon said had failed to meet its investment hurdle. The remaining partners: Ratio Guyana Limited, an Israeli-based energy company, and Cataleya Energy Limited, are likely to split ownership of the block 50/50, although there had been reports that Ratio was looking for new partners.
At the beginning of 2021, the oil block co-venturers 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 square kilometre 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.
Even though Exxon is in the process of withdrawing from Kaieteur Block, the company has attested that the block still has potential. Last year, Routledge had said that the company decided to exit the block based on pressing constraints; leaving the block was not a reflection of its value.
The company has said that in leaving Kaieteur, which it said has been derisked, it plans to focus on accelerating 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.
With ExxonMobil as the operator, Guyana 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 that 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. (G-8)