Latest update December 16th, 2024 9:00 AM
Exxon applies for Canje Licence renewal, to relinquish 20 percent of block
ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), has already applied for its Petroleum Prospecting Licence to be renewed for the Canje Block.
The relinquishment date, stipulated by the agreement, was March 4, 2019. It has been four months since that date passed, and Government still hasn’t enforced the relinquishment provisions.
According to the agreement, the contractor is expected to carry out a minimum work programme in the initial four-year period of having the licence, divided into two phases.
ExxonMobil’s Public and Government Affairs Advisor, Janelle Persaud
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 Agreement 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).
Exxon had indicated to Kaieteur News, weeks past, that it is following all processes, as per its agreement, and obligations as lead operator on the Canje block.
Recently, Kaieteur News contacted Exxon’s Public and Government Affairs Advisor, Janelle Persaud, to find out when the company would relinquish as per its agreement. Persaud said “Esso Exploration and Production Guyana Limited (EEPGL) submitted a Canje Block licence renewal application, including an area to be relinquished, in accordance with the Canje Petroleum Agreement and all applicable laws and regulations.”
She further provided that that application was submitted before the relinquishment date.
Oil & Gas Consultant, Dr. Jan Mangal, had said that the 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 this is on purpose.
Kaieteur News had contacted Commissioner of the Guyana Geology and Mines Commission (GGMC), Newell Dennison on this matter, and as far as he is aware, there has been no relinquishment for the Canje Block. He acknowledged that indeed, the contract is up for renewal and the provision in question would kick in. Dennison 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.
The Canje Block was awarded to Mid-Atlantic on March 4, 2015, after which, it got several companies to buy in. The first was JHI Associates Inc., a company that, like Mid-Atlantic, 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. It is now the lead operator on both concessions.
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.
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