The People’s Progressive Party/Civic (PPP/C) Government plans to go out to tender for a partner to help them develop the Block C offshore oil block, which is currently unawarded and which the Government believes holds significant resources and investment potential.
This was according to Minister of Natural Resources Vickram Bharrat, during the Guyana-Saudi Arabia Investment Engagement that was held in the dome of the Arthur Chung Conference Centre (ACCC) on Saturday. He described it as a major opportunity for investors.
“There’s a major opportunity for persons, companies, and countries that wish to invest in Guyana’s oil and gas sector. If you notice, Block C, which is close to Suriname and is close to the discovery, Apache discovery in Suriname, that block is unawarded.”
“It still lies with the Government of Guyana. And we’ve already decided that before the end of this year, we will go out through an open bidding process, to award Block C to any country, company or organisation, that is willing to partner with us to develop Block C,” Bharrat further said.
Earlier this year, Vice President Bharrat Jagdeo had said that Guyana had been the recipient of significant interest, particularly from Middle Eastern companies, to partner with the State in developing Guyana’s remaining blocks.
Guyana has long been expected to go out and auction oil blocks, both untapped and relinquished. Considering the more than 30 oil finds that have been made by oil giant ExxonMobil in the Stabroek Block, the country is likely to be in a good position to leverage the value of those blocks when the context of the global oil and gas industry is considered.
The relinquishment clause is typically included in contracts so that companies can relinquish a portion of the block when the renewable period is up, thereby allowing other companies to buy into the respective blocks.
For the Stabroek and Canje Blocks, operators are required to relinquish 20 per cent of their blocks after the first renewal period; while those of the Demerara and Corentyne Blocks are expected to relinquish 15 per cent within this period.
The Kaieteur Block’s relinquishment provision is said to be 25 per cent, then 20 per cent by the first renewal; with the Mahaicony and Roraima Blocks at 25 per cent. By the time of the first renewal for the Orinduik Block, the operators are not expected to relinquish any portion.
Another revelation from Bharrat during his presentation to the Saudi investors, is that Guyana is currently producing 300,000 barrels of oil per day, from the Liza Phase One and Two fields and the Liza Destiny and Unity Floating Production and Storage Offloading (FPSO) vessels, combined.
“We discovered oil in May of 2015, and we started production in December of 2019. To date we are producing at over 300,000 barrels per day with only two FPSOs. This, I’m sure you would agree with me, is unprecedented speed and I don’t think this has happened in any small developing country around the world – the rate at which we are moving our petroleum sector.”
“We have already signed two more licences. So very soon, as a matter-of-fact next year, we will see our third FPSO arriving in Guyana’s waters. Which will have a capacity of 220,000 barrels per day. And this will take us close to 600,000 by the ending of 2023,” Bharrat said.
He also noted that in the case of the Yellowtail development, a fourth FPSO will arrive in Guyana by 2024 called the One Guyana FPSO.
This, he said, will produce 250,000 barrels. Another Field Development Plan (FDP), for the fifth Warrau development, will also be handed over to Guyana very soon.
“And Government will be placed in a position where we will review and finally approve the fifth project in the Stabroek Block. And that will take us to over 1 million barrels per day of production. And this, we see, will happen in another five to six years from today. So, by 2027-2028, Guyana will be safely producing over 1 million barrels of oil per day,” the Minister said.
The Stabroek Block is 6.6 million acres (26,800 square kilometres). ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEGPL) is operator and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Limited holds 30 per cent interest and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds 25 per cent interest.
