Most oil block awardees submitted documents; Cabinet decision soon – VP Jagdeo

The content originally appeared on: INews Guyana
Vice President Dr Bharrat Jagdeo

The Guyana Government has received the required documents from most of the awardees from last year’s oil blocks’ auction. This now paves the way for Cabinet to decide on whether to move forward with contracts, and Vice President Bharrat Jagdeo is optimistic that this decision would be made soon.

Addressing a question from the media during his recent press conference, Jagdeo declined to put a definitive timeline on when this decision would be made, but said that only one company had outstanding information as of Thursday.

“I don’t want to put a timer. I think most of (them), except one, have submitted the required info. (That) has been the report that came in today. I asked them about it, so maybe that will come to cabinet now, and we will now know, go or no go. That is to conclude the full agreement,” he explained.

“But remember, the basics are: ‘Can you afford to pay the signing bonus?’ and, ‘Do you have a credible source from where the signing bonus is coming?’ Remember that question was raised, so it’s a credible source (we are looking for). You can’t say, ‘Well, I have two bags, and I want to bring them into the Government’. So, those are the key questions for us,” he disclosed.

Oil blocks offshore Guyana

The Vice President acknowledged that some of the companies do not have enough technical capacity to operate the blocks themselves. According to him, this would most likely result in them having to bring in people to operate in these licensed blocks.

“But because we’re getting the signing bonus, then we say, ‘You can bring in whoever you want, provided of course you stick with your plan’. And there’s an approved plan they have to stick with. And if they don’t meet the plan, there’s a massive fine of 50 per cent of the total plan. So that’s our two safeguards. The signing bonus, the approved plan and the fine, the potential fine of 50 per cent,” Jagdeo explained.

Jagdeo reminded that there are basic requirements for acceptance by the Government, including the financial ability to pay the signing bonus. He also acknowledged that while some of the companies lack the technical capacity, they have the option of bringing in operators to explore for oil.

Meanwhile, United States oil giant ExxonMobil has revealed that it remains open to possibly participating whenever there is a second bid round. According to Exxon Guyana President Alistair Routledge, the company remains in talks with the Government on the block they were awarded during the last auction.

“The auction process, the 2022 auction, as you know, we participated. We bid on one of the blocks. We were awarded the S8 block. We are in an ongoing discussion with the Government and the Ministry on what needs to be finalised. What documents do they need for that to be crystallized?” Routledge detailed.

ExxonMobil Guyana President Alistair Routledge

“ One question that often comes up in those discussions is the fiscal terms,” he said. “The Vice President has made it clear those are not up for debate. I would also like to make it clear that we have not, at any point, asked to modify the fiscals that were presented under the 2022 licensing round, but there are a whole lotta other documents and details and everything else that need to be worked on,” Routledge said.

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.Natural Resources Minister Vickram Bharrat had said in November that the six companies and groups 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.