…companies to be engaged in negotiations to complete contracts – VP Jagdeo
Kaieteur News – A consortium led by four formidable African-Guyanese women has made history by being the first set of women to secure two pivotal oil blocks in Guyana’s debut auction.
The brainchild behind this pioneering achievement, Sispro Inc., is spearheaded by an incredible quartet of women – Dr. Melissa Varswyk, Abbigale Loncke-Watson, Ayodele Dalgety Dean, and Dee George. They have been found eligible to be awarded a shallow water block called S3 and a deepwater block titled D2.
The foregoing announcement was made by Vice President, Bharrat Jagdeo during a press conference yesterday. Jagdeo recalled that the auction which was launched last year December had 14 blocks on offer but only eight received bids. Following a review of those bids, he said Cabinet approved several companies to be awarded various blocks.
Jagdeo said TotalEnergies EP Guyana B.V. in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas SDN BHD was approved for a shallow water block called S4. ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited was approved for shallow water block –S8.
Out of Nigeria, International Group Investment Inc was found eligible for two shallow water concessions—S5 and S10. An American and Ghanian partnership, Liberty Petroleum Corporation and Cybele Energy Limited, was approved for shallow water block—S7. Delcorp Incorporated, a Guyanese company, in collaboration with Watad Energy and Communications Ltd and Arabian Drilling Company was approved for deepwater block titled—D1.
Now that these companies have proven to be eligible for the blocks, Jagdeo said negotiations would be initiated to ensure companies have the wherewithal to carry out their respective exploration programmes. Such talks would also entail ensuring that the companies are capable of paying the respective signing bonuses for their blocks set at $10M for shallow concessions and $20M for those in deep water. Jagdeo said this has to be paid before the contracts are signed.
While an ExxonMobil consortium has been approved for a shallow water concession, Jagdeo said government anticipates that it may not be finalized given the company’s opposition to some of the terms in the new model Production Sharing Agreement (PSA).
ExxonMobil Guyana’s Country Manager, Alistair Routledge had said that the relinquishment timelines for example are too short and could prove challenging. The Guyana Government maintained however that the timelines would not be changed. “We may therefore have a situation where we may not be able to finalize with everyone because as you heard Exxon said they are not prepared to sign the PSA as it is currently structured and we have said if their demands are extreme then we will simply not proceed with the signing in that regard,” the Vice President said.
Guyana’s maiden auction launched in December 2022 featured 14 blocks but only eight received bids. Companies that will be awarded the new blocks will also have to agree to a new fiscal regime that requires the payment of a 10 percent royalty and a 10 percent corporate tax. The cost recovery ceiling will be capped at 65 percent in a given year, while profits will be shared 50/50 between companies and the state.