The government has decided that not all of the country’s oil blocks will be auctioned as some will be left for bilateral agreements with nations this country will negotiate with in the future, President Irfaan Ali says.
“I think very soon we are going to move to the auctioning of some blocks, and we have some blocks that are set aside for what is termed government-to-government partnership and we are looking at all our strategic partners for these blocks,” the President said during a press conference yesterday when the United Kingdom announced that it was waiving visas for leisure and business travel for Guyanese.
Ali did not go into detail, saying that “the distillation of the policy mix will come in the coming days”, even as he pointed to Barbados where the same action was taken.
He said when government speaks on the issue, it will also explain “what will constitute or what will be the role of each partner.”
And as it prepares to launch its first auction of oil blocks, government has said that it was finalizing the fiscal terms and conditions to guide those agreements it will enter into and will ensure the nation gets a “fairer share” from its oil and gas resources.
But it also stressed that it wants maximum global interest and competitive bidding, and will be embarking on “an intensive promotion campaign” that will ensure this.
“Cabinet is finalizing the new fiscal terms and conditions which will allow for the country to gain the maximum economic benefits as we advance the exploration and development of the Guyana offshore blocks,” the Ministry of Natural Resources had earlier this month stated in a press release.
According to the release, the 2022 bidding round will be opened for a number of months so as to give bidders ample time to prepare.
“The 2022 bidding round, which is expected to be officially launched soon … will be opened for several months which will give interested companies sufficient time to prepare their competitive packages and bid to win the available acreages offshore; which will be done in an open and transparent manner,” the release said.
Government said that when Cabinet has concluded setting the definitive terms of reference for the licensing round, it would achieve a number of objectives. They include ensuring that the country gets “a fairer share of revenues from oil and gas resources through improved fiscal arrangements to benefit the people of Guyana; safeguarding the safety of people and the environment by following international best practices in offshore oil and gas development; assuring investors of stability, predictability, and security on investment; and continuing with efficient and sustainable development of oil and gas resources while balancing the nation’s developmental agenda with its climate change goals.
Minister of Natural Resources Vickram Bharrat had last month told Stabroek News that government was still in the process of putting measures in place for the highly anticipated auction and consequently it would not likely be held before the end of the third quarter of 2022.
For his part, President Ali has said he wants locals to participate and that that he had discussed the issue of the auction of the blocks and wanting locals to participate, possibly though partnership with American companies that have the financial wherewithal and experience, when he met with US Energy Secretary, Jennifer Granholm.
“So that model has been attracting a lot of attention and I’ve been getting a lot of feedback, a lot of ideas from different players. Only recently, as I said, I had this meeting with the US Energy Secretary. We’re having other meetings. So I wanted to give myself an …opportunity to give myself that feedback on this model, because if we go to an auction and then auction out everything, then we lose the ability to come back to a model like this,” he had told this newspaper.
This newspaper understands that it is Vice President Bharrat Jagdeo, whose portfolio includes finance and overlooking the petroleum sector who is spearheading the setting of both the terms of reference and overlooking the fiscal arrangement for a new model Production Sharing Agreement.
The total area to be auctioned has also not been made public. On the availability of remaining blocks, Guyana Geology and Mines Commission (GGMC) Commissioner, Newell Dennison, had in 2018, told this newspaper that from rough determinations, approximately 9,500 sq. km is available within the coastal environment, 24,000 sq. km within the environment of the continental shelf, 10,000 sq. km within the deep water environment and 9,000 sq. km within the ultra-deep water environment. Most interest has been on the offshore area and particularly in the deep water environment following major discoveries there by ExxonMobil in 2015, putting the highly coveted Block C as the most sought after area.