President Dr Irfaan Ali officially launched the first auction for the development of 14 oil blocks, as part of efforts to develop Guyana’s oil and gas resources.
President Ali said the competitive bidding round is expected to close by April 14 2023, and new contracts will be awarded by the end of May 2023.
“This of course would follow negotiations and evaluation of the bids that we received during this bidding round,” the President said during a live broadcast on Friday morning.
He noted that the oil blocks on auction are for shallow and deep water areas. There will be a minimum signature bonus requirement of US$10 million for shallow water and US$20 million for deep water blocks.
The Head of State said the process will ensure that Guyana gets the ‘best possible outcomes’ based on lessons learnt.
“We have also stated that we respect the contract of the Stabroek Block, but that every new block will be subject to new terms and condition and in so doing, this bidding is taking into consideration lessons learnt, the experiences and new terms and condition,” he explained.
The bidding process ensures developers move ‘expeditiously’ with the development of the oil and gas resources, the president said.
President Ali added that strong contractual commitments and relinquishment obligations will also be in place during the bidding round.
Another key feature, the president said, is to improve the fiscal terms that provide for a greater balance in the share of revenues between the government and the contractors, while maintaining Guyana’s competitive edge regionally and globally.
“That delicate balance has to be struck and I’m very pleased to say that the conditions and requirements provided that balance,” the President said.
He assured that the process will be transparent as it imposes the minimum qualification criteria that reflect international best practices.
The president, however pointed out that stronger qualifications and requirements are set for deep water exportation as against shallow water.
There is a participation fee of US$20,000 that will see contractors gaining access to the virtual data room and participate in the competitive bidding process.
The President noted that the Guyana offshore basin has captivated the attention of the global oil market participants, being called the world’s fastest-growing super basin over the last four years.
Offshore Guyana is estimated to have potential resources in excess of 25 billion barrels of oil equivalent and an estimated reserve in excess of 11 billion barrels of oil equivalent.