No portion of Kaieteur oil Block returned

Jun 08, 2025 News

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…Govt. gives oil companies up to Feb. 2026 before final decision is made

Kaieteur News – To date, no portion of the Kaieteur Block has been relinquished. The agreement for the block spanning 3.3 million acres was signed in April 2015 between Guyanese authorities and ExxonMobil Guyana Limited (EMGL), the previous operator of the block, which led a consortium consisting Hess Corporation, Ratio Energy Ltd. and Cataleya Energy Ltd.

Though signed off at that time, Exxon and its partners were only allowed to conduct any works pertaining to the block in 2017. This approval was granted on the condition that only 40 percent of the block can be explored to steer clear of aggressive tactics from Venezuela.

A 3D seismic survey acquired for the southern portion of the block covered 5,750km2 and provided the foundation for maturing a significant prospect inventory on the block.

A single prospect has been drilled to date, which resulted in a sub-commercial oil discovery. The ExxonMobil-operated Tanager-1 well, which was drilled in August 2020, encountered 16 metres of net oil pay, a discovery of approximately 65 million barrels of oil in the prospect area, based on independent estimates by Netherland, Sewell & Associates Inc. (NSAI). However, this discovery was considered to be non-commercial as a standalone development.

However, in spite of a number of subsequent postponements, the operator at that time, ExxonMobil, had decided not to exercise its option to drill a second well on the block.

In September 2023, it was announced by Ratio Petroleum Energy Limited Partnership that both ExxonMobil and Hess had elected to withdraw from the Kaieteur Block and return their participating interests to the original Kaieteur Licence holders, Ratio Guyana Limited (RGL) and Cataleya Energy Limited (CEL).

Ratio and Cataleya then sought government approval to reassign the participating interests, so that RGL and CEL will each retain a 50% participating interest, and to appoint RGL as the operator of the block.

Under the terms of the Kaieteur Petroleum Agreement, and upon submission of an application to enter the second extension period, the participating interests on the block will have until February 2025 to commit to drilling a well, before having to relinquish 20 percent of the block, or if it so wishes, the entire contract area.

However, on November 17, 2024 Ratio Petroleum reported that a one-year extension, to February 2026, had been granted to the drilling decision date. An unofficial English translation of an announcement by Ratio Petroleum states that a formal request was submitted to Guyana’s Ministry of Natural Resources (MNR) in November 2024, seeking an extension of the exploration period. It was stated that the extension was requested on the basis of technical and economic findings, according to the translated document.

Ratio, in the statement, said that the ministry confirmed receipt of the request, adding, “Accordingly, the partners in the block are expected to receive an update from the Guyanese authorities on whether additional exploration activities will be approved or whether the block (or part of it) will be relinquished, by February 2026.”

Kaieteur News had reported that at the end of the first two years, bringing it to 2019, Exxon was required to “relinquish 25 percent of the contract area and commit to work programme in phase two.”

This never happened. In the next 24 months that would follow, 2019 to 2021, Exxon was required to relinquish 20 percent of the block or the entire contract area. As a result of the COVID-19 pandemic, which had hit these shores in March 2020, Exxon had approached regulators for a one-year extension, thereby taking its period of relinquishment to 2022. A check of the MNR’s website shows that to date, no relinquishment has been made.

Despite the exit of ExxonMobil and Hess, Ratio and Cataleya remain committed to finding a new partner to help move exploration forward. Ratio Petroleum has publicly stated its intention to farm down a portion of its interest and bring in a new deepwater operator with the technical and financial capacity to pursue further drilling. The final decision by the Government of Guyana will be critical in determining the future of the Kaieteur Block.

The Kaieteur Block is located in the deepwater area of Guyana’s offshore territory, part of the prolific Guyana-Suriname Basin. This region has gained global attention in recent years following over 20 major oil discoveries, many of which were made by ExxonMobil Guyana Limited and its partners Hess and CNOOC in the nearby Stabroek Block.

The Stabroek Block discoveries have placed Guyana on the map as one of the world’s most promising frontier oil provinces, with an estimated 11.6 billion barrels of recoverable resources already confirmed.

Notably, the relinquishment of 20% of the Stabroek Block is now nine months past the deadline. An April 2025 statement issued by MNR noted that the requirements are expected to be completed “shortly” without offering a specific timeline for completion.

Under the terms of the 2016 Production Sharing Agreement (PSA), Exxon is required to return acreage where no commercial discoveries have been made in production, appraised or areas where there is potential commercial interest.

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. This extended the deadline to October 2024. The most recent disclosure from the ministry reiterated that it is still finalising the review of the relinquishment.

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• DeepwaterDrilling, Guyana Oil, OffshoreOil, OilBlocks, OilExploration, PetroleumSector

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