Published:Sunday 12:19 AM
Guyana on Friday opened bidding on 14 new offshore oil and gas blocks, hoping to capitalise on interest in lucrative fields that are expected to make the South American nation a major oil producer.
Guyana is home to one of the largest oil discoveries in the last decade. In 2019, two years after the find was announced, Exxon Mobil lifted the first batch of oil from the seabed off Guyana’s coast. A consortium led by Exxon has since successfully drilled more than 30 wells near the blocks that are currently being auctioned.
President Irfan Ali said the bidding period will run from Friday to May of next year to give companies time to study the blocks.
Companies can bid through April 14 after paying a US$20,000 fee to log into a virtual data room that provides information about the offshore area. Bids must be sent in by mid-April and results and awards made by the end of May next year.
“This, of course, will follow negotiations and evaluation of the bids that we received during this bidding round,” Ali said in a live Facebook post.
Guyana’s Cabinet has repeatedly said it would work to ensure that the country gets the best deal for what is widely regarded as its last remaining and revenue-producing economic patrimony-oil and gas.
Criticism about the current arrangements with the consortium, which also includes Hess Corporation and China’s CNOOC, the production-sharing agreement and tax-free incentives have received persistent attacks from all quarters of Guyanese society.
The deal, basically, allows Exxon and its partners to recover 75 per cent of its expenses from production, while splitting the remaining 25 per cent with Guyana in addition to a 2 per cent royalty. Activists want the royalty to climb to 10 per cent.
The government has declined to renegotiate the arrangements but has said that it will try to cash in on the agreements for the new blocks now being offered.