Vice President Dr Bharrat Jagdeo today announced the award of oil blocks offshore Guyana, following the country’s recently-concluded auction.
Sispro Inc., a Guyanese company, has received a shallow and a deep water block.
Other shallow blocks were awarded to Total Energies EP Guyana BV, Qatar Energy International E&P LLC, Petronas E&P Overseas Ventures SDN BHD (Malaysia); International Group Investment Inc; and Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited.
A shallow block was also awarded to Exxon/Hess/CNOOC.
Meanwhile, another deep water block was awarded to Delcorp Inc Guyana comprising of Watad Energy and Communications Limited & Arabian Drillers of Saudi Arabia.
“We now have to meet with parties awarded the blocks to negotiate the contract stage…,” Jagdeo explained.
He also emphasised that the new Production Sharing Agreement (PSA) and fiscal terms will not change, however, noted that government will be open to minor changes during the negotiations.
At the conclusion of the bid round in the auction, government had received 14 offers by six bidders for eight of the 14 oil blocks offshore Guyana.
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.
Bids were received for the D1 and D2 blocks in the deep-sea area and for the shallow area, on the S3, S4, S5, S7, S8 and S10.
See full list of oil block awards:
- S3 Block to SISPRO INC (Guyana);
- S4 Block to Total Energies EP Guyana BV, Qatar Energy International E&P LLC, Petronas E&P Overseas Ventures SDN BHD (Malaysia);
- S5 Block to International Group Investment Inc;
- S7 Block to Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited;
- S8 Block to Exxon/Hess/CNOOC; S10 Block to International Group Investment Inc.
- D 1 – Delcorp Inc Guyana comprising of Watad Energy and Communications Limited & Arabian Drillers of Saudi Arabia;
- D 2 – SISPRO INC (Guyana)
Meanwhile, in regard to the six blocks that received no offers along with the other remaining blocks offshore, President Dr Irfaan Ali has since hinted that these could be available for Government-to-Government deals.
For new deals, the current PPP/C administration 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 main operator, began producing oil on December 20, 2019 in the oil-rich Stabroek Block, which is 6.6 million acres (26,800 square kilometres).
From Guyana’s first oil find in 2015 to date, there has been a total of 46 discoveries offshore.
Hess Corp currently holds a 30% interest in the Stabroek Block, which is operated by ExxonMobil with a 45% interest while CNOOC holds the remaining 25% stake.
Only earlier this week, it was announced that Hess has entered into an agreement to merge with Chevron and this transaction is expected to be closed in the first half of 2024.
Experts have already commented that Chevron’s deep pockets could see more adventurous drilling in the Stabroek when it takes over Hess’ Guyana operations.
