VP Jagdeo: Portion of Exxon's Canje Block will be relinquished this year

VP Jagdeo: Portion of Exxon’s Canje Block will be relinquished this year

Sep 01, 2023 ExxonMobil, News, Oil & Gas

– Conditions for Kaieteur Block being reviewed

Kaieteur News – Vice President, Dr. Bharrat Jagdeo confirmed with Kaieteur News on Thursday evening that a portion of the ExxonMobil operated Canje Block is indeed due to be relinquished, adding that this will be done this year ends.

The chief policy maker for the oil industry addressed the said issue at a press conference held at the Office of the President on Thursday. There, this newspaper sought an update on when portions of the Kaieteur and Canje blocks would be relinquished since according to their agreements, this should have occurred since last year.

For the Kaieteur Block, the agreement in place with an ExxonMobil-led consortium states that 25 percent should have been relinquished in 2019 and another 20 percent given up in 2022. The total portion to be relinquished would be equivalent to approximately 5414 km2.

Back in 2019, Exxon and its partners which included Total S.A, Mid Atlantic Oil and Gas, and JHI Associates Inc. were required to give up 20 percent of the Canje block which at that time spanned 6100 km2. This relinquishment was in keeping with its agreement signed in March 2015 with Guyanese authorities. Exxon had relinquished 1,220km2, thereby reducing the block to 4880km2.

The agreement for the Canje block states that after that relinquishment, and a renewal of its licence, another 20 percent would have to be returned to the State after three years. That 20% would amount to 976km2. With respect to the Canje Block, the Vice President told this newspaper that a portion is indeed due for relinquishment and that will be done this year.

As for the Kaieteur block, Jagdeo said indeed there was no relinquishment of any portion of this concession. He recalled that a side letter agreement was in place back in 2017 which states that only 40 percent of the block could have been explored by Exxon. The official said this was in place due to past aggressions by Venezuela.

Expounding further, Jagdeo recalled the troubles faced by Anadarko which was the operator of the Roraima Block that is contiguous to Venezuela’s border. He noted that the company faced difficulties when one of its vessels was seized by Venezuelan authorities. Given that the Kaieteur Block is also contiguous to the Venezuelan border he said a number of issues have to be carefully examined.

“…I don’t want to say more about it…We will probably give more details but those are the facts and I will have to review it,” the official said.

In the oil and gas sector, “relinquishment” refers to the process where a company returns a portion of an area it was allowed to explore or produce oil and gas. That process is also governed by specific timelines. Relinquishment, according to several pieces of literature, is also considered critical for governments as they can auction those returned portions to other oil companies, thereby channeling more opportunities for revenues to the State.