Insisting that he was trying to keep himself “out of these matters”, Vice President Bharrat Jagdeo on Thursday advised that all questions regarding the negotiations with the successful six oil block bidders be directed to Minister of Natural Resources Vickram Bharrat.
The VP was asked at a press conference about the phase of negotiations between the government and bidders who had won the offshore oil blocks that were up for auction in September. Saying only, “all the parties as far I know are in negotiations [and] I cannot say how these negotiations are going,” he diverted further questions to Bharrat.
He said that although the Cabinet has approved these awards, the respective companies which are currently in engagement have to verify their plans, show sources of financing, and the ability to pay the signature bonus among other credentials. The VP said that once all of these procedures are followed, these companies will know how they stand in terms of the negotiations.
The Government of Guyana last month announced the recipients of oil block awards for the country’s deep and shallow-water blocks, which were auctioned during the 2022 Licensing Round.
The successful companies were S3 Block to Sispro Inc (Guyana); S4 Block to Total Energies EP Guyana BV, Qatar Energy International E&P LLC, Petronas E&P Overseas Ventures SDN BHD (Malaysia); S5 Block to International Group Investment Inc; S7 Block to Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited; S8 Block to Exxon/Hess/CNOOC; S10 Block to International Group Investment Inc; D 1 – Delcorp Inc Guyana, comprising Watad Energy and Communications Limited & Arabian Drillers of Saudi Arabia; D 2 – Sispro Inc (Guyana).
Sispro Inc is a Guyanese women-led company.
The 2022 Licensing Round, Guyana’s first-ever auction, was initially announced in December 2022 by President Irfaan Ali. After several extensions and updates to the fiscal framework, the auction concluded with six bidders submitting 14 offers for eight of the 14 oil blocks offshore Guyana.
Jagdeo had explained in October that if one of the larger companies agreed to the draft Production Sharing Agreement, this country’s government will be ready to collect the money and deposit it, but if another company wanted time to finalise plans, they will be given that scope. “We want to do a good job. Time is not the issue here; it is doing a good job. Ensuring the due diligence is done, and getting a proper contract signed. We are not running a sprint here,” he had said, “so if it takes one month in some cases and three in another, providing a good job is done…
“In the discussions, we will know if people are serious. If a company said we need two years, we can’t have that. So, let’s have the discussions first with the companies and… then get a decision on the maximum time.”
Many observers had said that given the adjusted terms of the Production Sharing Agreement, which were far more beneficial to Guyana than the one ExxonMobil sealed in 2016, there would not likely be many bidders. This was particularly so given the increasing shift away from carbon fuels and the projections that in a decade or so, demand would fall substantially. Bidders face a probable 15-year timeline between exploration and possible production with no guarantee that light crude would be found.
