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Exxon still to return 20% of Stabroek Block
…Oil minister says govt finalising acreage
Kaieteur News- Minister of Natural Resources, Vickram Bharrat, has disclosed that ExxonMobil Guyana Limited is nearing the completion of its obligation to return 20% of the Stabroek Block to the Government of Guyana.
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), Exxon, the operator of the block, is required to hand back acreage where no commercial discoveries have been made in any appraisal or producing areas.
During his Ministry’s end-of-year press conference on Tuesday, the Minister provided an update on the progress of the relinquishment process. “With regards to the relinquishment, I’m happy to say that between the Ministry, GGMC (Guyana Geology and Mines Commission), and Exxon, we have already agreed in principle on the acreage, the submission of the report, and the acreage that will be relinquished,” Bharrat stated.
Minister of Natural Resources, Vickram Bharrat
The Minister said that the relinquishment of a producing block involves a more complex process than simple mathematics would suggest, in relation to handing back 20% of the 6.6 million-acre Stabroek Block to the State.
Minister Bharrat said, “It’s a producing block…we need to take out the production area, we need to take out the appraisal area and the area where there is potential commercial interest right, that’s in the PSA. We can’t go against that so once we exercise that out of take of the acreage then whatever is left you relinquish the 20% of that.”
He further elaborated on the technical challenges involved in finalising the relinquishment process. Minister Bharrat said, “It’s not as simple as it may seem, is very complex especially with blocks that are producing because you have Liza 1 there, Liza 2 there, Payara you have the other developments, then you have discoveries, you have appraisal areas so we now have to decide where we are taking these acreage from…”
The Stabroek Block
However, the Minister assured that the process is in its final stages. “Once we finalise that we will give you the exact acreage that should be finalised very soon…we will give you a full report on it with the exact acreage but I can tell you yes, the process has been advanced significantly almost to completion,” he said.
Notably, the last update received from Exxon back in November was that they have applied for the relinquishment area and were in the process of finalising the acreage to return to the state. 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.
Notably, Exxon was required to return a portion of the Block to Guyana since 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 honoured by the new government, with Vice President Bharrat Jagdeo indicating that the pandemic’s impact was significant enough to justify the grace period.
(Exxon still to return 20% of Stabroek Block)
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