After announcing last week that ExxonMobil has indicated that it would walk away from the current oil block auction process, Vice President Bharrat Jagdeo yesterday said that the company has clarified that it had not made such a statement and was still very much interested in acquiring the block it was awarded.
“I was notified by Vickram Bharrat, the Minister, that they [ExxonMobil] had indicated that they would walk away… because the conditions were not right. So since my public statement, Exxon has written to us saying that might not be the full story [and] that they still have some interest in it,” Jagdeo said yesterday when asked by Stabroek News for clarification on the issue.
“I verified that was said in a meeting; they said it might be a misunderstanding… so let’s see how it goes,” he added.
Last week, in updating on the auction, Jagdeo said, “…remember Exxon pulled out and they wanted to use the area for carbon capture and storage and we don’t want to do that at this stage”.
That was the first time anyone had heard about a proposal for carbon capture and storage for the oil block.
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 said in October of last year that if one of the larger companies agreed to the draft Production Sharing Agreement, this country’s government would 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 that the due diligence is done, and getting a proper contract signed. We are not running a sprint here,” he had said, adding, “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.”
In January this year, he updated that those companies which accepted awards would have had until the end of that month to submit additional documents requested by government for the due diligence process.
The Vice President explained that firms were given awards based on initial documents submitted, but were told since then that they would have to submit other documents as needed for the due diligence process with government before any agreement could be reached.
“We assessed the proposals on a number of criteria. Now we have to verify what are in those proposals… before the final sign off.
We have to do the due diligence to see what was in the proposal that won the bid, [that] the companies can meet those obligations, and they have the wherewithal to address those issues.
“That is where we are now. The source of funds have to be legal and everything attached to it [scrutinized],” he added.
Then in May, following a report by Reuters of an announcement by Minister in the Ministry of Public Works, Deodat Indar, that an agreement had been reached with one of the companies, Jagdeo clarified that no contract has been entered into but that the consortium of Qatar Energy, Total Energies, and Malaysian state-owned oil firm, PETRONAS, had gone the furthest in current negotiations with the government.
In August, at a press conference, this country’s Minister of Natural Resources explained that with each company getting approval, all of the companies were on equal ground, but that signing of contract dates could come sooner for some than others. “We would have mentioned that [the consortium of] PETRONAS, Qatar and Total would have advanced and were slowed down a bit by the others because we wanted all companies to have the PSA… so all companies are in the position now that they would have received the revised PSA and they are reviewing that with the possibility of signing very soon. Some may sign before some,” he said.
“All six companies have indicated that they are in a position now to pay the signing bonus which is required upon signing the PSA.
We are not going sign any agreement with any of the companies if they are not signing the signing bonus…,” he added.
