Guyana’s first oil block auction: What to expect | LVS, Gaming, & Transocean Forum

Guyana’s first oil block auction: What to expect Sept 17, 2022 7:06:16 GMT -5

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Post by Blitz on Sept 17, 2022 7:06:16 GMT -5

Guyana’s first oil block auction: What to expect

By Shikema Dey - September 17, 2022
oilnow.gy/featured/guyanas-first-oil-block-auction-what-to-expect/

All eyes will be on Guyana come September when the country opens its first offshore bid round. This will be a major step for Guyana, a country that has never handed out oil licenses through a competitive process.

Oil and gas bid rounds help countries like Guyana get the most value from their natural resource. And since this one is Guyana’s first, here’s how a typical auction process goes.

The bid round would kickstart with an announcement by the executing agency. In Guyana’s case, this would be the Ministry of Natural Resources. The announcement would name the blocks up for grabs and their accompanying data, like size and location.

In addition to information about the blocks, the government will have to establish the terms prospective licensees will operate under. Guyana is working to finalise a model petroleum agreement for use in this auction.

Governments may make certain terms into biddable items. For example, if the profit oil split is a biddable item, the company that offers Guyana the highest portion of profit oil is more likely to win the award.

Excluding Exxon, other operators could reduce competitiveness of auction – VP | OilNOW

It is typical for there to be a participation fee for interested investors to have access to information on the open acreage to complete their evaluations. It would include geophysical data like 2D or 3D seismic surveys, well and field data.

With that technical package in hand, the investors can now evaluate the prospectivity of blocks and may propose a work program as a biddable item. This could include additional assessments and a number of wells to be drilled.

There is also a pre-qualification process where the interested investor has to show proof of its technical, legal and financial assurance to guarantee that it is competent enough to develop the block.

Guyana’s September auction will not include onshore blocks – VP | OilNOW

At the launch of the auction, government will indicate the deadline for submission of bids. Vice President Dr. Bharrat Jagdeo said the auction is likely to be launched in September and conclude by January or February next year.

At the bid’s closure, the investors would have already submitted all pertinent documents – bid form, cash bonus, bank guarantee – all part of their proposals. A government-appointed committee then opens and evaluates the bids based on set criteria or a point system.

Successful proposals are usually bids with the highest points. The blocks are then awarded so that work can begin, on the signature of a contract. In some cases where there is a tie, a signature cash bonus is used to select a winner, or the investors and the evaluation committee negotiate.

Countries like Brazil, Suriname, and Trinidad and Tobago have their own unique offerings to attract investor interest during bid rounds. Not every bid round will follow the same process or apply the same rules.

Interest is already high for Guyana’s bid round, with investors looking to grab up major portions from Block C – a deepwater acreage – bordered by the Kaieteur and Canje blocks, and the Suriname border. There is also a lot of interest in the relinquished portion of the Canje block, with an area of about 1,352 km2.

Almost a third of the acreage in the Guyana basin remains unlicensed; those could be up for grabs at the new bid round. And the possibility exists for the acreage to increase if conditions of relinquishment are added to the new open areas.

Guyana’s first oil block auction: What to expect Sept 19, 2022 7:01:50 GMT -5

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Post by Blitz on Sept 19, 2022 7:01:50 GMT -5

Updated: September 19, 2022

Around one-third of Guyana’s offshore acreage could be up for grabs in new bid round

By Shikema Dey - September 19, 2022
oilnow.gy/featured/around-one-third-of-guyanas-offshore-acreage-could-be-up-for-grabs-in-new-bid-round/

Guyana is set to auction off portions of its offshore oil basin – dubbed the world’s hottest offshore play, before the end of 2022.

A map of the Guyana Basin (dated August 17) shows that almost a third of the acreage remains unlicensed; those could be up for grabs at the new bid round. And the possibility exists for the acreage to increase if conditions of relinquishment are added to the new open areas.

ExxonMobil currently holds the most offshore blocks – Stabroek, Kaieteur and Canje. At 6.6 million acres, Stabroek is the largest block in the basin. Exxon has a 45% stake in Stabroek and 35% each in Kaieteur and Canje Blocks.

There is also the Roraima Block, operated by Occidental Petroleum along with the Kanuku and Orinduik Blocks operated by Spanish multi-national Repsol and the Africa-focused Tullow Oil respectively.

There are also the Demerara and Corentyne Blocks operated by CGX Energy and the Berbice Block operated by ON Energy – a CGX subsidiary.

Guyanese should have a chance to participate in oil blocks auction – Vice President | OilNOW

Both the Demerara and Berbice Blocks will be included in the auction, according to Vice President Dr. Bharrat Jagdeo, since they were both relinquished by CGX in principle. This agreement to relinquish the Blocks is yet to be enacted, so they remain unlicensed on the books.

There is also the Oreo Block and Block C; both are unlicensed.

Anticipation has been growing for the auction because of Exxon’s remarkable success in the Stabroek Block; with close to 11 billion barrels of oil equivalent discovered and even more expected as it rolls out its aggressive exploration campaign.

Block C has garnered the most though, as a concession that stretches 2.3 million acres (9600 Km2). And it is anticipated that equal interest will be had in the relinquished portions of the Canje and Orinduik blocks.

The government is working swiftly to determine the fiscal terms to ensure balanced benefits to the parties involved. This may delay the oil block auction, Vice President Dr. Bharrat Jagdeo said recently.

He said the issue is “contentious” since the government has faced some criticism for its decision not to renegotiate the Stabroek Production Sharing Agreement (PSA) terms. Some say the contract is not favourable to Guyana, and while the administration agrees with some criticisms, it says contract sanctity is important and that the Stabroek Block partners will keep incentives necessary to facilitate the aggressive development of the discovered resource.