Latest update November 5th, 2024 1:00 AM
Exxon told to return portions of Kaieteur, Canje Blocks
…but not 20% of oil-rich Stabroek Block
Kaieteur News – The Government of Guyana (GoG) has written to ExxonMobil Guyana to inform the oil company that it has to relinquish portions of the Kaieteur and Canje Oil Blocks.
This was revealed by Minister of Natural Resources, Vickram Bharrat, on Tuesday during his end-of-year press conference. This newspaper had reported that Exxon was expected to relinquish portions of the Kaieteur and Canje Blocks since last year, according to their agreements.
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 1,220 sq. km, thereby reducing the block to 4880 sq. km.
Minister of Natural Resources, Vickram Bharrat
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 976 sq. km.
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.
President of ExxonMobil Guyana, Alistair Routledge
This update by Minister Bharrat on Kaieteur and Canje Oil Blocks comes at a time when the Opposition is mulling taking legal actions to get government to expose records to justify the extension of the relinquishment provision to oil giant, ExxonMobil for the oil-rich Stabroek Block.
That extension allows the operator to hold on to 20% of the Stabroek Block, which was expected to be handed back to Guyana this year, until 2024. It was former President David Granger who had approved the extension of the relinquishment provision in 2020, weeks before the General and Regional Elections. The approval however required reports by the oil company to prove its operations were impacted by the COVID-19 Pandemic. Vice President, Bharrat Jagdeo had told reporters that government was satisfied that the company’s operations were indeed affected by the pandemic. He however made it clear that government did not need to prove this to the Opposition parties or any other interested stakeholder to ease public tension.
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