Latest update November 5th, 2024 1:00 AM
Exxon finally returns 20% of Stabroek Block
President of ExxonMobil Guyana Limited (EMGL), Alistair Routledge (left) and the Stabroek Block (Right) (Exxon finally returns 20% of Stabroek Block)
Kaieteur News- ExxonMobil Guyana Limited (EMGL) has officially returned 20% of the Stabroek Block to the Government of Guyana (GoG) 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.
Minister of Natural Resources Vickram Bharrat confirmed on Monday that Exxon had indeed handed back the stipulated 20% portion of the Stabroek Block, though further details on the returned area have yet to be disclosed by the ministry.
It should be noted that Exxon was required to hand back acreage where commercial discoveries have been made. The company had up to October 2024 to decide on which portion to hand back 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.
Exxon was required to return a portion of the Block to Guyana in October 2023, however, former President, David Granger had granted the company an extension in 2020 to conduct further exploration activities.
According to documents released by the Ministry of Natural Resources, Granger signed an order giving Exxon a one-year grace period to hold in their entirety, the Stabroek, Canje and Corentyne Blocks. The three orders state that Granger was written to by Exxon’s Country Manager, Alistair Routledge on July 2, 2020, seeking a grace period given the COVID-19 pandemic and its impact on restricting the implementation of exploration for the three blocks.
The extension granted by the former Head of State one month before he demitted office, required the operator to provide proof that its work programme was indeed impacted.
Notably, despite the change in administration, the extension was honored by the new government, with Vice President Bharrat Jagdeo indicating that the pandemic’s impact was significant enough to justify the grace period.
The Stabroek Block is located about 120 miles from the coast of Guyana and spans 6.6 million acres. Exxon had made over 40 oil discoveries in that block.
(Exxon finally returns 20% of Stabroek Block)
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