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Guyana still one of the hottest spots in the world, says Jagdeo after delaying oil auction

Jun 25, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – Guyana’s Vice President, Dr. Bharrat Jagdeo, recently announced the postponement of the country’s oil blocks auction to finalize the framework for the industry which will include new laws and model contracts. But despite concerns about the repeated delays, Jagdeo remains confident that Guyana continues to attract enviable interest from investors.

He made the case that Guyana has good appeal and a record of discoveries, stating, “We’re one of the hottest spots in the world, so the others who are in the auction process, and over 80 of them, I don’t think they have the record of discoveries like Guyana.”

He had said weeks ago that 85 other nations are in the ring, competing with Guyana for investment. The Vice President often argues in favour of competitiveness when asked to advocate on Guyana’s behalf, such as with calls for a higher royalty.

If competitiveness is the priority, then delays it is known, can undermine investor confidence. Companies require assurance of a well-organized and predictable framework to invest their dollars in. However, Vice President Jagdeo maintains that Guyana’s track record make it an enticing investment destination.

He acknowledged the delays, explaining, “These things take time, we were a bit more optimistic that we could have gotten them done.” But he said it was important for thorough research and analysis to be done to ensure Guyana’s offerings to investors remain competitive while maximizing benefits for the country.

What he did not reiterate, however, was that the administration’s concentration on the recently concluded Local Government Elections impeded the progress of preparations for the round, which is what left essential documents, including model petroleum agreements, and a replacement of the Petroleum (Exploration and Production) Act, unfinished. The Petroleum Agreements have been revised to include comments, and are being reviewed again. Because the agreements will be grounded in law, they will be finalised after Guyana’s archaic oil laws are repealed and replaced by the Petroleum Activities Bill.

Jagdeo also stressed that it is important to maintain a transparent and stable regulatory environment. “I think [investors] appreciate that we’re sticking with our commitment, which is a new [Production Sharing Agreement] and a new law so they can study both before they put in their final offer… I think they appreciate our discussion. We got back to them, so we’re not going to lose any interest.”

He has assured that the government will allow investors sufficient time to review the documents before submitting their bids. The government is yet to announce the revised timelines for the auction.

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