Bidders set sites on eight of country’s 14 oil blocks
President says government satisfied with first auction

GUYANA’S offshore blocks have attracted interest from six bidders, and while the government is content with the offers for eight of its 14 oil discoveries, the State is open to partnering with other bilateral allies.

This was revealed on Wednesday by President, Dr. Irfaan Ali, who, during a discussion at the Inter-American Dialogue in Washington DC, said India, Qatar and the Dominican Republic have signalled their interest in exploring and developing offshore oil blocks.

“India would have expressed a willingness to [work] from government to government, Qatar had expressed a willingness in working government to government. The DR [Dominican Republic] and a number of other countries expressed that interest [too],” the Guyanese Head of State said while responding to questions at the event.

On Tuesday the country closed its first oil block auction.

Six companies: 1. ExxonMobil, which already has the giant Stabroek Block, 2. SISPRO INC (Guyana), headed by Guyanese businesswomen, 3.Total Energies EP Guyana BV; Qatar Energy International E&P LLC; Petronas E&P Overseas Ventures SDN BHD (Malaysia), 4. Delcorp Inc Guyana and Watad Energy and Arabian Drillers of Saudi Arabia, 5.Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited and 6. International Group Investment Inc and Montego Energy SA (London) submitted bids.

Given the current climate of the market, Mr. Ali said he is pleased with the number of bids the country has received.

He noted that while the country is open to government-to-government partnerships in the sector, it was imperative that the process is done in an open and transparent manner first.

“We have been able as a newcomer in this business to demonstrate great transparency and openness in putting out the blocks for public option and what we have seen is a number of major companies,” the President said.

The country had planned to open its auction in May of this year; however, this was delayed to September to allow for the country to critically examine the regulatory framework which included a new production-sharing agreement which sees the country benefitting more.

Back in March of this year, the country’s Vice President, Dr. Bharrat Jagdeo, had said the plan was to increase royalty rates to 10 per cent from two per cent, the corporate tax to 10 per cent from zero, and reduce oil companies’ so-called cost-recovery limits.

Still, the new contract will ensure Guyana “remains one of the most competitive countries in the world even with these changes.

As it relates to the awards of oil blocks to bilateral partners, Mr. Jagdeo had also assured it would be based on mutual benefits and profit sharing.

Guyana’s economy has undergone a radical transformation after Exxon Mobil Corp.’s 2015 discovery of massive tranches of offshore oil.

From producing no crude at all, Guyana produces an average of some 400,000 barrels of oil per day. This is expected to increase to 600,000 barrels per day by 2024.

At present, Guyana’s total recoverable oil reserves stand at more than 11 billion barrels of oil, with crude oil reserves ranking at number 17 in the world and third in Latin America and the Caribbean.

Since the discovery of oil offshore Guyana in 2015, international interest has increased in the country, especially for its oil potential and the potential of various developing sectors—a development driven by funds acquired from the production of oil and gas.

Industry analysts estimate that by 2035, just over a decade from now, Guyana’s oil output will reach some 1.7 million barrels of oil per day, surpassing United States oil production and becoming the fourth-largest oil producer in the world.