Latest update February 6th, 2025 7:27 AM
Delay in enforcing relinquishment provisions for Canje Block exposes Govt’s incompetence– Petroleum Consultant
By Kiana Wilburg
The more than three months delay by Government to enforce or activate the relinquishment provisions of the Petroleum Prospecting Licence for the Canje Block exposes just how incompetent it is, or even worse if on purpose.
Oil and Gas Consultant, Dr. Jan Mangal
Expressing this view during an exclusive interview with Kaieteur News yesterday was Oil and Gas Consultant, Dr. Jan Mangal.
The former Presidential Advisor noted that this sort of inaction is not particularly new as similar issues most likely plagued all the other blocks, including the Stabroek Block.
Dr. Mangal said that since 1999, there were numerous obligations, which ExxonMobil as the licensed holder was required to meet.
“We need to be sure that all obligations were met, and appropriate areas relinquished. We need to look in detail at the period during which force majeure was claimed.
“The performance of a detailed review of all obligations and their implementation is a task I highlighted during my tenure as Presidential Advisor.”
Dr. Mangal added, “I made it clear that that this is an area that the Energy Department needs to be focused on. I also said that we need to go through this with a fine-tooth comb with capable lawyers and be comfortable that all obligations for being in possession of these licences are met.
“If not, the government has grounds to take action…”
PSA DETAILS
According to the Canje Block Production Sharing Agreement (PSA), the contractor is expected to carry out a minimum work programme in the initial four-year period of having the licence. That four-year period is divided into two phases.
Phase one consists of 18 months and requires the contractor to get all available geological data and conduct research at the local and regional level to better understand the complex features of the Guyana-Suriname basin. In addition to this, a minimum of 1500 line km of 2D seismic is to be acquired, processed, and interpreted to define possible prospects.
Phase Two consists of 30 months. During this time, the contractor is expected to acquire, process, and interpret a minimum of 500 square kilometres of 3D seismic to identify drilling targets and complete a geotechnical/pre-drilling survey.
The Canje Block PSA states that at the end of the initial four years, the Contractor shall elect either to relinquish the entire contract area or relinquish 20 percent of the contract area which spans 6021 km.
That is comfortably more than two times the size of Region Four (Demerara-Mahaica).
Mid-Atlantic, since acquiring the block in 2015, got several companies to buy into the block. The first to cut a deal was JHI Associates Inc. Like Mid-Atlantic, JHI has zero experience in the oil industry. It has 17.5 percent interest in the Canje Block.
French oil major, Total, was able to buy 35 percent of the working interest. ExxonMobil, which is the lead operator on the Stabroek Block, was able to get a 35 percent interest in the Canje concession too.
This works out in Exxon’s favour as Canje is strategically located next to the oil-rich Stabroek Block. Mid-Atlantic continues to hold on to a mere 12.5 percent.
It also must be recognised that there are individuals now working in key high-level positions in the Petroleum Directorate or Dept. of Energy who previously worked for Mid-Atlantic.
Recently, this newspaper contacted Janelle Persaud, Exxon’s Public and Government Affairs Advisor to ascertain if the American multinational has been in contact with government on how it will proceed with relinquishment as stipulated in the contract.
Persaud only said, “We have followed and will continue to follow, all processes as per our agreements, including relinquishment.”
Kaieteur News had also contacted Commissioner of the Guyana Geology and Mines Commission (GGMC), Newell Dennison, on this matter. As far as he is aware, there has been no relinquishment for the Canje Block.
He had acknowledged that indeed, the contract is up for renewal and the provision in question would kick in. Dennison had said that the Department of Energy should be able to provide more information, if needed.
Calls to the Department’s Head, Dr. Mark Bynoe were unanswered.
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