Latest update December 4th, 2024 2:40 AM
ExxonM mum on whether it wants new oil block on own terms
—but confirms talks continuing with Guyana Govt.
Kaieteur News- United States oil major ExxonMobil has declined to comment on whether it wants to use the new shallow-water block it won at Guyana’s first auction for carbon capture and storage contrary to what this country wants.
However, the company confirmed that it is continuing to negotiate with the Guyana Government on the terms for developing the shallow-water oil block, an Exxon spokesperson told Reuters on Monday. Exxon, Hess and CNOOC won offshore block S8 in a bidding round launched in late 2022 by President Irfaan Ali’s administration, Reuters reported. The group remains interested in the block and talks are continuing, an ExxonMobil spokesperson said via email, Reuters article said. According to the news agency, the spokesperson declined to disclose whether it aimed to use the block for carbon capture and storage, or for oil and gas exploration.
ExxonMobil Guyana President, Alistair Routledge
Vice President Bharrat Jagdeo had initially reported that Exxon had pulled out of the block since they wanted to use the area for carbon capture and storage, “and we don’t want to do that at this stage.” However, last Thursday, Jagdeo walked back on his statement saying that since he made the disclosure, Exxon wrote government saying that “that might not be the full story, that they still have some interest in it.” “So from last week to now, after my press conference and I verified it with Vickram Bharrat, that was said in a meeting, and they said that there might have been a misunderstanding that they have not walked away from it. So, let’s see how it goes.”
Guyana’s maiden auction launched in December 2022 featured 14 blocks but only eight received bids. The fiscal regime of the new PSA requires the payment of a 10 percent royalty and a 10 percent corporate tax. The cost recovery ceiling will be capped at 65 percent in a given year, while profits will be shared 50/50 between companies and the State.
ExxonMobil is the operator of the Stabroek Block and it holds 45% interest in that block. Its partners Hess and CNOOC hold 30% and 25% respectively. Guyana’s oil-rich Stabroek Block, operated by ExxonMobil, requires a meagre 2% royalty, no taxes, 75% cost recovery ceiling each month which leaves 25% of profit to be shared with Guyana. Stakeholders had warned that the terms of the Exxon deal could deter investment since the new PSA now requires greater fiscal benefits for the country.
Blocks in red received bids during the maiden auction
This led to calls for new projects in the Stabroek Block to be subjected to these terms; however, the government remains adamant that seeking greater benefits could slow the pace of development and chase investors.
Moreover, Block S4, a shallow water portion, has been awarded to TotalEnergies EP Guyana B.V. in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas SDN BHD. Out of Nigeria, International Group Investment Inc. was found eligible for two shallow water concessions—S5 and S10. An American and Ghanian partnership, Liberty Petroleum Corporation and Cybele Energy Limited, was approved for the shallow water block—S7. Delcorp Incorporated, a Guyanese company, in collaboration with Watad Energy and Communications Ltd and Arabian Drilling Company was approved for a deepwater block titled—D1.
Government had disclosed that International Group Investment Inc. accepted the PSA with processing ongoing; Cybele Energy Limited accepted the PSA and is in the final review stage; Delcorp accepted the PSA and is now in the final stages of review and the TotalEnergies-led consortium accepted the PSA and is currently in the final review stages.
(Exxon mum on whether it wants new oil block on own terms)
- CNOOC, Exxon, ExxonMobil, Hess
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