– Block C, relinquished acres in Canje & Demerara among available blocks
Ahead of the soon-to-be-launched auction of Guyana’s remaining oil blocks, the Government is in the process of mapping out the blocks that will be up for bidding so that there can be a greater understanding of what is available.
This is according to Minister of Natural Resources Vickram Bharrat, when questioned on Monday by Inews. Bharrat pointed out that ExxonMobil is the operator in the Canje Block and, therefore, relinquished some acreage there based on their agreement. Other parts of offshore Guyana are also being mapped.
“We are in the process of mapping out the available blocks. We know that Block C for sure is available. There is relinquished acreage in the Canje Block. And there are a few other blocks, for example, the Demerara and Berbice Blocks that are available,” he said.
“So, more data will be released very shortly, based on the statement we will start that process very soon. So, we expect as soon as Cabinet finalises those new fiscal terms, we will release all the information.”
According to Minister Bharrat, significant progress has been made towards launching the auction, and soon, Cabinet will finalise the new fiscal terms that will be implemented for those new blocks or acreages that will be up for bidding.
“It will be an open process that will last several months. We will decide definitively on a timeframe, whether we give three months or four months, or even six months. Those are some of the practices around the world,” the Minister said.
“Countries give four months or six months to companies to prepare their bid documents and to ensure that they present a proper proposal to the Government of Guyana, having reviewed all the terms and conditions of the bidding process and also having had an opportunity to look at the data and in their own way, assess the blocks available.”
Since the discovery of oil in 2015, the Guyana offshore basin has seen unprecedented development, with Guyana setting a new paradigm for expeditious development of oil and gas resources. According to S&P Global, “the four- and-a-half-year time frame from discovery to the first production places Guyana first among global deep-water jurisdictions in terms of the average time to bring major discoveries on stream”.
With the upcoming bidding round, the Natural Resources Ministry outlined last week that the Government expects to chart a new path as the country’s offshore areas emerge as a potential super basin with over 11 billion boe (barrels of oil equivalent) discovered to date, and with substantial exploration activities ongoing, this figure is expected to increase significantly.
The auction is expected to attract global interest, although experts have warned that it is important to balance the PSA’s (Production Sharing Agreement) fiscal terms. During a recent visit to Guyana, Norwegian consultancy Rystad Energy Vice President Shreiner Parker noted that while Guyana will get interests from around the globe when it goes out to auction its oil blocks, getting the financial terms of the blocks right would be very important. He had given the example of Brazil.
“In recent years, they’ve had unsuccessful bid rounds. Even though Brazil is an extremely important source of offshore production globally, they were unable to attract the interest that it wanted, because the fiscal regimes were too onerous. And they were asking for too much.”
“So, the balance that Guyana will have to strike on these new blocks is understanding that we’re no longer going to have the Stabroek fiscal regime. We are a petroleum province. Yet at the same time, we cannot expect that it’s a guaranteed success and that every hole poked into the ground will produce oil. So, getting that fiscal regime correct is going to be paramount to attracting interest globally,” Parker had said.