Home News Stabroek Block: ExxonMobil will work with Govt to identify 20% being relinquished...
…says company waiting to examine fiscal terms, blocks on offer in next bid round
Oil giant ExxonMobil is expected to relinquish 20 per cent of the lucrative Stabroek Block later this year and according to ExxonMobil Guyana’s President Alistair Routledge, they will work with the government to identify which parts of the block to give up.
Following a one-year extension last year, ExxonMobil is now expected to relinquish 20 per cent of its Stabroek Block holdings in October of this year. During a press conference on Tuesday, Routledge was asked about this and whether the company has already identified which areas it will give up.
“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.”
“Relinquishment of acreage in the Stabroek Block, that is scheduled to take place in October of this year. And that is when the next prospecting license renewal takes place. And at that point, we will release acreage back to the government,” Routledge further explained.
Vice President Bharrat Jagdeo has said that the relinquished portion of the Stabroek Block is likely to be included in the next bid round, also expected later this year. According to Routledge, the company will wait and see what is on offer, before it makes a decision on participating in the next auction.
“I mean we’ll look forward to that. We’re always interested. We’ll wait and see what is specifically placed into that bid round and what the terms of the bid round are, before we make that decision,” he said.
Relinquishment
The 2016 oil contract for the Stabroek Block, signed between ExxonMobil and the previous A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, stipulates the relinquishment of 20 per cent of its acreage in the Stabroek block not held by discoveries.
This relinquishment was due last year, but the US oil giant secured a one-year extension, until October 2024, 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, preventing the fulfilment of a contract.
Jagdeo had, since last year, indicated Government’s intention to put the relinquished areas back on the market. He had said the 20 per cent acreage that would be relinquished had already been identified, and that it is nothing material in the oil-rich Stabroek Block, which is estimated to have over 11 billion oil-equivalent barrels, and where production activities have been ongoing since December 2019.
Currently, there are three Floating Production, Storage and Offloading (FPSO) vessels being operated by Exxon and its partners – Hess Corporation and CNOOC – producing ‘light sweet’ crude in the Stabroek Block.
Government has reported that some 142.9 million barrels of oil were produced in 2023 from the Liza Destiny, Liza Unity, and more recently the Prosperity FPSO, which came on stream last November.
These three FPSOs in the Stabroek Block are projected to realise production of over 550,000 barrels of crude oil per day in 2024, with an expected ramp up to over 600,000 daily in the latter part of this year.
Auction
When it comes to the upcoming auction of its oil blocks, the People’s Progressive Party/Civic (PPP/C) government wants to hold later this year, it first has to complete ongoing process with the bidders from last year’s licensing round.
The bidding round which was launched in December 2022 closed off in September 2023 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 – two deep-sea blocks and six shallow-area blocks.
Among those awarded oil blocks during the bid round was a Guyanese female-led company, Sispro Inc., which received a shallow block (S3) and a deep-water block (D2). 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 government has said it wants to see uniformity in the non-fiscal terms of the contracts these oil block awardees will eventually sign, so that all the oil contracts have the same conditions. (G3)
