PPP too distracted with Local Government Elections to finalise critical documents for oil blocks auction

Jun 11, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – Preparations to complete documents for Guyana’s first offshore licensing round have been delayed because the People’s Progressive Party Civic (PPP/C) administration is busy behind Local Government Elections. Vice President Dr. Bharrat Jagdeo acknowledged that these crucial documents required for the licensing round, including the finalised model petroleum agreements and an amendment to the Petroleum (Exploration and Production) Act, are yet to be completed.

Vice President, Bharrat Jagdeo

Speaking at a PPP/C press conference last Thursday in his capacity as General Secretary, Jagdeo revealed the government’s preoccupation with the local elections as the reason for the delay in finalising these pivotal documents. The local government elections, which are set to conclude on June 12, have significantly affected the government’s focus and availability to expedite the necessary procedures for the offshore licensing round, with the submission deadline looming on June 15.

“It’s very tight now,” said Jagdeo, acknowledging the mounting pressure. “And to be frank with you, the local government elections interfered a bit with it. And also the drafting… it’s taking time.”

The VP stressed that the bulk of the feedback received pertained to the amendment of the legislation, which has also been time-consuming, rather than the Production Sharing Agreement (PSA). He however assured that the government would return to address these concerns in a matter of days.

The documents not being finalized has the potential to inhibit the success of the licensing round, because investors are left with uncertainty, and would not be sure whether to make bids. Exxon, for example, has not decided whether it will make a bid because of this very reason.

While Jagdeo stopped short of saying that government would extend the deadline for the submission of bids, he noted the government’s devotion to providing investors with the necessary documents well ahead of the deadline.

“I don’t want to be quoted as saying there will be an extension, but we made a commitment to have these two documents available to the investors before they put in final bids. We’re not going to waiver on that commitment,” Jagdeo said.

The government had already amended the timelines for the licensing round once before, because it had needed more time to change the law.

Jagdeo said maintaining transparency and integrity in global markets is of utmost importance for the government. Therefore, he maintained that ensuring that investors have ample time to study the documents and make informed bids is a key priority. He also assured that consultation will be done before the law is taken to Parliament. He stated that the first draft of the law has likely already been submitted by the drafters.

Eleven of the oil blocks on auction are located in the shallow area and three in the deep water zone. The government said investors have shown interest in all of the blocks.