Latest update December 23rd, 2024 3:40 AM
Exxon says they are finalising area of Stabroek Block to hand back to govt.
Minister of Natural Resources, Vickram Bharrat
The Stabroek Block
Kaieteur News- ExxonMobil Guyana Limited (EMGL) said that it has initiated the process of returning 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.
This publication reported that 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. For their part, Exxon said on Tuesday, “…We have applied for the relinquishment area and are in the process of finalising that area with the government.”
In light of Exxon’s response, Kaieteur News sought clarity on whether or not the 20% of the Stabroek Block is back with the government, and was informed that a statement will be forthcoming. Up to press time, this was not issued.
Exxon is required to hand back acreage where no commercial discoveries have been made, a condition that allows Guyana to reallocate these areas to potentially generate new exploration interests. The company had up to October 2024 to decide on which portion to hand back to the State.
Moreover, 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.
President, ExxonMobil Guyana Limited, Alistair Routledge (Exxon says they are finalising area of Stabroek Block to hand back to govt.)
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 says they are finalising area of Stabroek Block to hand back to govt.)
- Alistair Routledge, Minister of Natural Resources Vickram Bharrat, President of ExxonMobil Guyana Limited (EMGL), relinquishment, Stabroek Block
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