Major oil companies showing interest in Guyana’s only unlicensed deep-water block

Dec 09, 2021 News

—-Min. Bharrat says govt. committed to transparent bidding process

Kaieteur News – Natural Resources Minister, Vickram Bharrat has confirmed with Kaieteur News yesterday that major oil companies have indeed expressed “great interest” in Block C, Guyana’s only unlicensed deep-water block, which borders the Kaieteur and Canje blocks.

Map showing Block C’s proximity to other concessions offshore Guyana

He noted as well that one company is so interested that it has offered to do a seismic survey of the block “at no cost to Guyana.” The official was keen to note however that all interested parties will have to be patient until next year when Guyana is expected to launch its first bid round.
“The government’s position as iterated by Vice President, Bharrat Jagdeo and President, Dr. Irfaan Ali is that a transparent process will be followed for the award of these blocks and the legislative and regulatory framework will be in place for us to secure the most value for these assets…So yes, there is a lot of interest in Block C but we are committed to the people and ensuring that they are not short- changed.”
Minister Bharrat also stated that the government is keen on resisting the temptation to enter into any bilateral arrangements while stressing the need for citizens to secure maximum benefits from their resources. In addition to Block C which will be up for auction next year, Minister Bharrat said relinquished portions of offshore concessions will also be part of the mix. He recalled that this was noted last month by Vice President, Jagdeo.
Kaieteur News had reported the Vice President as saying that the historic oil blocks auction will occur in the third quarter of 2022. He had said the government will be looking to auction new blocks which will now require that it aggressively enforces the relinquishment provisions in the contracts it has with companies such as ExxonMobil, Tullow, and Repsol.
The Vice President had said, “We have been caught up with now trying to put in place the architecture for the management of the industry but now we have to move to enforcement and then auctioning.”

To go to an auction however, Jagdeo said the government would have to make several policy decisions. “We will have to get someone who has done this before. We have to get technical help. Secondly, we have to also make a decision like some countries are doing, whether we want to invest, like Suriname is doing, to shoot 3D seismic and then auction the block with seismic data which gives us a higher price.”
If it decides against this, Jagdeo had said the government could decide to just auction the areas as is since it would ultimately have to stand the costs associated with the 3D seismic survey. Another key consideration he said is whether government should preclude existing companies such as ExxonMobil to be part of the bidding round. It should be noted that ExxonMobil is the only company, which has a hold on the largest acreage in the Guyana basin. If it acquires more, it would only serve to increase its monopoly.
“So we have to make that policy decision…,” the Vice President noted while adding that if there is need to amend the laws in the future to allow for this auction to take place then it would certainly occur.