decision to be made on new licence for Repsol

VICE-PRESIDENT, Dr. Bharrat Jagdeo on Thursday announced that approval will be granted for Tullow Oil to sell its shares in the Orinduik Block to Eco-Atlantic.
During a press conference at the Office of the President, he said: “The Orinduik issue, we have in principle agreed that approval will be given for Tullow to sell its share to Eco and to exit that block.”

The Orinduik Block offshore Guyana is owned by the oil and gas company, Tullow Oil, which recently signed a deal to sell Eco-Atlantic its assets. As part of the deal, Eco Guyana, a subsidiary of Eco (Atlantic) Oil & Gas, will purchase the entire stake in Tullow Guyana.

In a press release, Tullow said: “Tullow’s decision to exit the Orinduik licence is in line with its strategy to focus on its high-return production assets in Africa, and infrastructure-led exploration around producing hubs and delivers its objective to unlock value in emerging basins.”

It was reported that Eco-Atlantic will pay $700,000 in cash upon the transfer of Tullow Oil’s 60 per cent equity and operatorship of the Orinduik licence to Eco.
Also, Eco had told reporters after the sale that it will look to craft a “farm-in” agreement with another company in the aftermath of Tullow’s departure.
Farm-in deals allow small companies such as Eco (Atlantic) to sell part of their equity to a larger company with experience and manpower to drill offshore. That new partner will likely take on Tullow’s mantle as operator and lead exploration and development.

With the green light for this deal imminent, Dr. Jagdeo said discussions are also underway regarding the issuance of a new exploration licence to Kanuku Block operator, Repsol.
“So, in May, effectively, the property was back with the Government of Guyana. So, the Government of Guyana has had discussions with them over this week,” he said, adding that although there has not been any policy decision made at the Cabinet level, the application for a new Petroleum Prospecting Licence will be favourably considered.
Dr. Jagdeo also added that if the government decides on a negotiated position, then the company must comply with certain conditions such as the new Production Sharing Agreement (PSA), new fiscal agreements, and signing bonus, among other things.

While addressing naysayers, the Vice-President said that one must take note that if the company does not get back the oil block, then the US$500 million expended within the area will be lost, since the exploration activity is done at the risk of the investor.

The Kanuku petroleum agreement indicates that the licence should have expired naturally in May, 2023.
Under the licence, Repsol holds the operatorship of the Kanuku block, with a 37.5 per cent working interest. Tullow holds 37.5 per cent and Total Energies/Qatar Petroleum (TOQAP) holds 25 per cent.