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Companies granted extra time to submit bids for 14 oil blocks
Kaieteur News – The Ministry of Natural Resources (MNR) on Wednesday announced the extension of the period for submission of bids for the 14 oil blocks on auction.
In a statement to the press the Ministry of Natural Resources said, “On behalf of the Government of Guyana, (it) is pleased to announce the extension of the Guyana 2022 Licensing Round’s bid submission deadline to July 15, 2023.”
Initially, the auction was intended to run until April 14, 2023, with contracts expected to be signed the following month.
The Updated Schedule for Guyana’s Licensing Round
Following the submission of tenders for the oil blocks, the bids received will be evaluated between July 19 and August 7, 2023. The Licensing Round will include negotiations between the parties, commencing August 9 and concluding August 28, 2023.
Contracts will be awarded on August 31, 2023 according to the updated schedule of activities.
The bid round was officially launched on December 9, 2022. According to the Ministry, it continues to receive strong global interest and the government has benefited from insightful feedback during the consultation periods of the Indicative Terms and Guidelines and the draft model Production Sharing Agreements (PSAs).
The Ministry also explained that government recently concluded agreements with PGS Exploration (UK) Limited and CGG Data Services to reprocess additional 2D seismic data relevant to the blocks for tender. This will allow existing and prospective participants of the licensing round to benefit from the availability of further seismic data to better inform the bids submitted.
According to the Ministry, “The Government of Guyana remains committed to the successful execution of the Guyana 2022 Licensing Round and the strengthening of the nation’s fiscal and legal petroleum management frameworks.”
It noted that the sector must be governed by a modern regulatory framework. To this end, it committed to the strengthening of the 1986 Petroleum (Exploration and Production) Act.
Eleven of the oil blocks on auction are located in the shallow area and three in the deep water zone. Each area is governed by separate PSAs. They range between 1000 square kilometres to 3000 square kilometres with the majority of them being close to 2000 square kilometres.
The oil companies will be expected to pay a 10 percent royalty and a 10 percent corporate tax. The cost recovery will be capped at 65 percent in a given year, while profits will be shared 50/50 between the parties.
IHS Markit, a leading information services provider headquartered in the UK is taking lead on guiding The Guyana Government on the auction.
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