–signals interest in upcoming oil-block auction

ENCOURAGED by its massive successes and discoveries at the Stabroek Block offshore Guyana, ExxonMobil is seeking to broaden its horizons, as the company has signalled an interest in the upcoming bidding rounds for offshore areas.

This is according to ExxonMobil Guyana President Alistair Routledge, who made the announcement on Thursday during an engagement with reporters.

“We’re always interested in new acreage, and, clearly, where we’ve had some success, it brings a certain degree of interest, and we should be knowledgeable on it. We’ve registered for the bigger end,” Routledge said.

He related that the company will examine the data the government has provided, along with other things before making the decision on its participation in the auction.

“… When we have all of that together, then we will be in a position to make a decision on whether or not we bid,” Routledge said.

The Stabroek Block is 6.6 million acres (26,800 square kilometers), with its gross recoverable resource now estimated to be more than 11 billion oil-equivalent barrels, including Liza and other successful exploration wells.

President Dr. Irfaan Ali last year announced that the government hopes to award the contracts by the end of May. Guyana is among 65 countries that will be launching the auction of oil blocks.

The blocks being put up for auction range in acreage from 1,000 sq. km to 3,000 sq. km, with 11 in shallow water, and the other three in deep water.

The bidders will be evaluated on their work programmes, financial offers, and local-content commitments.

There won’t be any restrictions on the number of bids a company is allowed to submit, but a successful bidder will be limited to an award of no more than three blocks.

There is a participation fee of US$20,000 for the bidding process for each block.

The winning bidders of the shallow-water exploration blocks must pay a minimum of US$10 million signing bonus, and twice that amount for the deep-water blocks.

Bidders will also be required to provide a development plan for consideration, along with their financial bids.

Under the new fiscal terms and other conditions for future Production Sharing Agreements (PSAs), successful companies will be subjected to 50 per cent profit sharing, a royalty rate of 10 per cent, and corporate tax of 10 per cent, among other things.

President Ali had previously said that Guyana’s offshore basin has captured the attention of global oil market participants, and has been called a gateway to the world’s fastest-growing super basin over the last few years.

“Guyana’s offshore [fields] are estimated to have potential resources of in excess of 25 billion barrels, and estimated reserves of in excess of 11 billion barrels,” President Ali had said.