Guyana to conduct 3D seismic study ahead of upcoming oil block bid round

The content originally appeared on: INews Guyana
The Prosperity FPSO in the Stabroek Block [SBM Offshore photo]

The Government has taken a definitive step towards conducting its own 3D seismic study of the oil blocks offshore Guyana, ahead of the upcoming oil blocks bid round that is planned for later this year.

It was explained in a notice issued by the Natural Resources Ministry, in which the State says it is seeking a reputable and experienced firm to conduct a “3D Multi-Client Seismic Survey” in the Exclusive Economic Zone (EEZ) offshore Guyana.

According to the government, the firm that is eventually contracted will be required to acquire, process and interpret the 3D seismic data, with a view of paving the way for exploration and the development of oil and gas resources offshore.

Additionally, the firm will be required to ensure “high-quality seismic data is available for effective evaluation during future bidding and licensing rounds.” Bids must be submitted by June 20, 2024.

The ministry also noted that for a firm to be eligible for the assignment, “the firm will be an internationally recognised firm with prior experience successfully completing three similar assignments/contracts at least 12 years prior to the application submission deadline.”

With respect to the upcoming auction of its oil blocks, the government wants to hold later this year, it first has to complete ongoing processes with the bidders from last year’s licensing round.

The bidding round which was launched in December 2022 closed off in September 2023 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.

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.The government has said it wants to see uniformity in the non-fiscal terms of the contracts these oil block awardees will eventually sign, so that all the oil contracts have the same conditions.

And the government had recently indicated that they are clearing the way for the consortium of TotalEnergies, QatarEnergy, and PETRONAS to move on to the negotiation phase of the contract award… the only awardee from the 2022 oil blocks’ auction that has reached this stage so far.

There is also the expected relinquishment of acreage in the Stabroek Block. Following a one-year extension last year, ExxonMobil is now expected to relinquish 20 per cent of its Stabroek Block holdings in October of this year.

There are relinquishment clauses, which 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 were required to relinquish 20 per cent of their blocks after the first renewal period; while those of the Demerara and Corentyne Blocks were required to relinquish 15 per cent within this period.

The Kaieteur Block’s relinquishment provision was 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.