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Guyana’s outdated laws allow ExxonMobil to have monopoly in Guyana Basin
Kaieteur News – When oil companies are awarded licences to explore blocks whether on or offshore, they have a timeframe within which they must carry out their exploration. In Guyana, a petroleum prospecting licence is awarded for a period of four years, following which, it can be renewed twice. Each renewal lasts for three years but at each application, the licence holder must relinquish a portion of the block.
Depending on the size of the block and the agreement negotiated with the authorities of the day, the contractor may have to give up between 15 to 20 percent of the block.
In the case of ExxonMobil, which is the operator of the Stabroek Block, it was required to relinquish portions of the offshore concession over time. It has been in possession of the block since 1999. A portion of the relinquished block now forms part of the Canje Block, which lies 180km offshore Guyana in deep to ultra-deep water.
Even though ExxonMobil was required to surrender a portion of the Stabroek Block so that it would not have a monopoly, it was still able to circumvent the system by being allowed to farm in or buy into the block and become its operator with a 35 percent working interest. It was also able to get its hands on another contiguous block called Kaieteur.
As result of Guyana’s antiquated legal framework, which has zero safeguards to prevent this, the American oil giant has its tentacles wrapped firmly around approximately 11 million acres offshore Guyana.
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