The Government of Guyana is still engaged in the negotiation stage with the six companies that were awarded oil blocks from the recent bid round auction.
Vice President Dr Bharrat Jagdeo made this disclosure when he was asked for an update during a press conference on Thursday.
“No, [the negotiations are] not completed,” he told reporters at the People’s Progressive Party/Civic (PPP/C) Freedom House headquarters.
Government had previously stated that it wanted to conclude the agreements with those companies that were awarded oil blocks before the end of this year.
Last month, Natural Resources Minister Vickram Bharrat indicated that the negotiations were slated to commence soon. During his end-of-year press conference on November 14, Bharrat said the Government had already written to the six companies and groups, formally notifying them of the award and informing them of the impending start of negotiations.
Minister Bharrat had noted at the time that the companies had already indicated their readiness to start exploration work and cover the cost of the signing bonuses every new oil company must pay – US$10 million for shallow water and US$20 million for deep water.According to Bharrat, the Government intends to hold them to this.
“We’ve officially written to them and indicated that we’re going to start the negotiations as early as next week. So, we will update you further as to the progress of those negotiations. We’re hoping that the negotiations will go well, and all the companies can be awarded those blocks; provided that one: they’re in a position, which they’ve already indicated, that they can pay the signing bonus.
“The second main criterion is the work programme, and the resources to ensure they can carry out that work programme. Because we’re very serious about the work programme, and these companies have already submitted a work programme. So, they’ve already agreed to it in principle, so nothing should change from the work programme they submitted to us,” the minister stated.
If companies cannot fulfil the work programmes they submitted to the Government, Bharrat noted, there would be “stiff penalties”. As it is now, he noted, further talks must be held between the Government and these companies on these work programmes.
“We want exploration activities to take place as soon as possible. We know that they have to do seismic and other studies, because we would have auctioned the blocks with limited data that was available, and not conducting any seismic, which would have cost considerable resources. And take some time to get it done as well,” Bharrat explained.
Following its launch in December 2022, the bidding round closed off in September with six companies bidding on eight of the 14 blocks offshore that were up for grabs. In total, there were 14 offers made on those blocks – two deep-sea blocks and six shallow-area blocks.Of the 14 blocks in the auction, three were for deep-sea areas and the other 11 for shallow areas, ranging from 1000 to 3000 square kilometres (sq km).
Among those awarded oil blocks during the bid round was a Guyanese female-led company, Sispro Inc., which received a shallow block (S3) and a deep-water block (D2). Other shallow blocks were awarded to Total Energies EP Guyana BV in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas Ventures SDN BHD (Malaysia), which got Block S4; Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited, which got Block S7, and International Group Investment Inc of Nigeria, which got two blocks – S5 and S10.
Another shallow block, S8, was awarded to the Stabroek Block partners – ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited.
The second deep-water block – D1 – was awarded to Delcorp Inc Guyana, which comprises Watad Energy and Communications Limited and Arabian Drilling Company of Saudi Arabia.
Meanwhile, during last month’s press briefing, Minister Bharrat made it clear that none of the blocks is located in disputed waters offshore Guyana. According to the Minister, Exxon had asked the Government for permission to conduct exploration activities, and after consultations with the Ministry of Foreign Affairs, the advice given was to wait for the International Court of Justice (ICJ) to rule on the border controversy with Venezuela.