As Government continues to face criticism over its handling of Petroleum Sharing Agreement with oil giants exploring in Guyana’s deep seas, some stakeholders have been calling for the implementation of competitive bidding for the remaining oil blocks.
Government on Thursday through its Oil and Gas Advisor Matthew Wilts has outlined that a moratorium was placed on the remaining blocks following deals already signed with ExxonMobil, Esso, Hess and Nexen.
“We have currently in place a moratorium on licensing right now because we need to understand the lay of the land, we are speaking about reviving the legislative framework, we also believe that significant players are already in the deep water, we are speaking about Tullow, Total and Anadarko, the Exxon block, there is still significant areas to be exploited.
The announcement follows the recommendations made by Opposition Leader, Dr Bharrat Jagdeo who had posited that these remaining blocks should be kept for future generations.
However, Wilts also posited that the temporary block could be lifted as Guyana will be seeking to attract new investors by late 2019 or early 2020.
The advisor’s comments followed media questions seeking to find out what steps the Energy Department was making to correct weak legislation governing the sector.
One of absent legislation is a depletion policy which many oil exporting countries have since reserved in oil wells and oil fields to reduce overtime as in the case of what regional neighbour Trinidad & Tobago is currently facing.
The moratorium does not include United Kingdom-based Company Tullow Oil which is the operator of the Orinduik Block, with a 60 per cent interest; while Eco Atlantic Oil and Gas is its partner with the remaining 40 per cent.
Meanwhile, Head of the Energy Department in the Ministry of the Presidency Dr Mark Bynoe revealed also that there is less interest being shown in shallow and onshore oil exploration.
However, he said that Government hopes to advance this process by creating a package, which includes data that is necessary so companies understand the resource base.
Oil and gas giant ExxonMobil had said that it is likely to commence oil production in Guyana by March 2020.
Guyana and ExxonMobil entered into an agreement in July 2016, which will see the nation receiving a 50/50 profit and a two per cent royalty.
Oil from just the Liza Phase One could be over US$1.5 billion after five years and over US$7 billion over the life of the project.