Jagdeo supports rigid implementation of relinquishment provisions in oil blocks

Jun 28, 2019 News

The Canje Block PSA states that at the end of the initial four years, the contractor shall either relinquish the entire contract area or 20 percent of the contract area which spans 6021 kilometers, that is more than two times the size of Region Four– Demerara Mahaica.
And yesterday, Leader of the Opposition, Bharrat Jagdeo, related during his weekly press conference that the Government of Guyana, should not just keep the relinquishment provisions for oil companies and their blocks, but it should rigidly implement them.
He states that the government should not weaken the relinquishing provision because it establishes that oil companies should not “mess round”.
“A lot of them cannot raise the money and when the experience comes in for them to drill for oil, they cannot.
“What they are doing is playing with the market; making money by flipping blocks… But through these relinquishment provisions a significant amount of blocks get returned to the government, for use or relocation, and this is a huge safeguard against people who acquire the blocks, sit on them, and then hope that they could make a deal. So this relinquishment provision is vital,” he noted.
On June 21, last, Kaieteur News reported that the Petroleum Prospecting License for the Canje Block which was awarded to Mid Atlantic Oil and Gas Inc. on March 4, 2015, by former President Ramotar, is more than three months past its time for renewal.
According to the Production Sharing Agreement (PSA), the contractor is expected to carry out a minimum work program in the initial four- year period of having the license. That four-year period is divided into two phases.
Phase one spans 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, 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 kilometers of 3D seismic to identify drilling targets and complete a geotechnical/ pre-drilling survey.
Like Mid Atlantic, JHI has zero experience in the oil industry.

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Jagdeo supports rigid implementation of relinquishment provisions in oil blocks

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