Guyana’s offshore oil exploration auction has caught the attention of multiple companies like Shell, Petrobras, and Chevron. It has been planned to auction off 14 offshore oil blocks with aims to increase the South American country’s oil independence and decrease the dominance of the Exxon Mobil cartel in its oil sector.
The winners of the bidding are to be announced next month. This auction will likely represent the hottest oil regions of the decade, and oil companies are getting impatient to capitalise on this black gold mine.
Bharrat Jagdeo, the Vice President of Guyana, will be present in Houston to be the speaker at the energy conference CERAWeek. He wishes to gather support for his country’s first-ever competitive bidding round.
Jagdeo said that he is confident that this step will be transformational for the citizens of Guyana and is in a rush to get things rolling before the net-zero policies start coming.
Jagdeo will be meeting with US government administrators, as international and state-owned oil companies, while in Houston to discuss the bidding process and generate future collaborations in mutual sectors. He is an able person to appropriately chance upon this opportunity to foster Guyana’sGuyana’s energy space and uplift the country’s economy.
According to the government, the interested companies have made payments to examine the seismic data. This move will help them make better decisions about whether to submit the offers or not.
Vickram Bharrat, Guyana’s Energy Minister, has stated that six significant worldwide producers (without disclosing their identities) have shown interest.
According to officials with knowledge of the matter, none of these companies has made a decision regarding their bids as they are waiting for the government to announce contract terms.
It is estimated that up to 25 billion barrels of oil and gas can be present off the coast of this small South American country. The 6.6 million acres (26,800 sq km) Stabroek block, one of the country’s most important regions, is controlled by a cartel of Exxon Mobil, Hess, and CNOOC, with well over 30 findings to date.
According to reports, oil mammoths like Exxon, QatarEnergy, Chevron Corp, Shell PLC, and Petrobras are the ones who made the payment of $20,000 to get hands on a copy of the geologic data on the 11 shallow water and 3 deep water blocks.
In totality, three sources stated that Chevron is highly concerned with obtaining Guyana’sGuyana’s geological data. It is to be noticed that Chevron already holds blocks in the neighbouring countries of Suriname and Venezuela.
Guyana has started its direct dialogues with the governments that control the state-owned oil companies on the 14 blocks and other nearby areas. In the coming years, It may reoffer after reclaiming up to 20 per cent of Exxon’sExxon’s largest block.
QatarEnergy and Exxon have commented that they are awaiting the complete disclosures of the contract terms from the government to look for in the bidding process. Chevron, Shell, and Petrobras abstained from commenting on their developments.
Jagdeo told news outlets that the Guyanese government looks forward to firms like QatarEnergy taking part in direct negotiations and also being a part of the bidding process.
Schedule Delays
At the end of March, Guyana intends to release a new Production Sharing Agreement (PSA) model to provide offshore blocks on lease. There was a delay in presenting the rough plan that was to be released on 13 February for a two-week-long public consultation. Now the auction sale is scheduled for 14 April.
In comparison to Exxon’sExxon’s chief contract, the proposed regulation will roughly double the government’s revenue from oil production to 27.5 per cent of royalties and profit and an additional newly levied 10 per cent corporate tax.
Jagdeo stated that the current situation is slightly inclined towards the corporates, creating an unbalanced position between them and the government. They are also trying to convince the oil companies to be more transparent in sharing information.