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ExxonMobil tight-lipped on Stabroek Block acreage to be handed back to Gov’t this month
…says Gov’t will provide update after concluding process
(ExxonMobil tight-lipped on Stabroek Block acreage to be handed back to Gov’t this month but company’s President says relinquishment process on schedule to be completed)
President, ExxonMobil Guyana, Alistair Routledge
Kaieteur News – President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge is hesitant to release the total acreage of the Stabroek Block that will be handed back to the Government of Guyana (GoG) this month, through a process called relinquishment.
In the oil and gas sector, “relinquishment” refers to the process where a company returns by specific timelines, portions of an area it was allowed to explore or produce oil and gas. Relinquishment is particularly critical for governments as they can auction those returned portions to other oil companies, thereby channeling more opportunities for revenues to the State.
In keeping with the provisions of the 2016 Production Sharing Agreement (PSA), the operator of the Stabroek Block was granted four years to prospect. The contract also provides for no more than two renewals for a period of three years each.
Last week, Routledge told reporters that the relinquishment process is still on schedule to be completed this month. He could not however provide an update on the size of the 20% portion to be handed back to the GoG.
He explained, “On the Stabroek Block renewal and relinquishment for the second term, I don’t have an exact acreage number for you and I think it would be more appropriate for us to release that number when we have completed that process with the government.”
Exxon’s Country Manager further noted, “I don’t want to give you a number that they (GoG) haven’t blessed, but we follow the methodology that’s laid out in the Petroleum Agreement. I haven’t heard that there’s any significant differences in understanding or interpretation of that and as soon as we have concluded that I’m sure government will be ready to provide an update.”
Map showing discoveries made by Exxon in the Stabroek Block (Source: Uaru FDP)
It was reported that ExxonMobil was required to relinquish a portion of the block in October 2023; however, a one-year extension was granted by former President, David Granger on request of the company. The oil giant had complained to the then Head-of-State that its drilling operations were impacted by the COVID-19 pandemic. Granger approved the application, on the grounds that Exxon would provide updates to the government on the impacts to its operations.
Despite calls for transparency in the extension, upheld by the PPP-administration, Vice President Bharrat Jagdeo had told reporters that government was satisfied that the company’s activities were indeed affected by the pandemic and that government did not need to prove this to any other interested stakeholder to ease public tension. Notably, the Ministry of Natural Resources in August 2023 said the one-year extension on the exploration works to be executed on the Stabroek, Kaieteur and Canje Blocks were not completely upheld.
It only allowed the extension to be applied for the Stabroek Block and not the Kaieteur and Canje blocks.
The Stabroek Block which spans 6.6 million acres and holds over 40 oil discoveries is so massive that it is equivalent to 600 oil blocks offshore Guyana. It should be noted that Exxon will not be required to hand back acreage where commercial discoveries have been made.
(ExxonMobil tight-lipped on Stabroek Block acreage to be handed back to Gov’t this month)
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