HOUSTON (Reuters) – Guyana’s upcoming auction of offshore oil exploration blocks has attracted at least 10 companies, including Shell, Petrobras and Chevron, to consider the hottest deal in a decade, people close to the matter said. oil area.
The South American country is offering 14 offshore blocks in an attempt to speed up economic development and reduce the dominance of the ExxonMobil-led consortium over its oil industry. A winning bidder is expected to be selected next month.
Guyana’s Vice President Bharrat Jagdeo spoke at the CERAWeek energy conference in Houston on Monday to drum up support for the country’s first competitive tender.
“We think it’s huge, transformative for our people. We’re in a frenzy to get this done before net zero comes,” he told Reuters, referring to cutting emissions by 2050. Goals for fossil fuel use.
While in Houston, he plans to meet with U.S. government officials, international and national oil companies.
Companies interested in the April round have paid for seismic data to assess the blocks and decide whether to submit offers, according to the U.S. government. Energy Minister Vickram Bharrat said the companies included six large international producers, without naming them.
None of the companies has decided on a bid as they wait for the government to release the terms of the contracts, the people familiar with the matter said.
Jagdeo said Guyana was considering setting up a state investment company to hold, with partners, stakes in offshore blocks offered through intergovernmental negotiations. The investment firm will not be an operator, he added.
Guyana is estimated to have as much as 25 billion barrels of oil and gas off its coast. A consortium including ExxonMobil, Hess and CNOOC operates the country’s most important area, the 6.6 million-acre (26,800-square-kilometre) Stabroek block, which has made more than 30 discoveries to date.
Oil majors including Exxon, Qatar Energy, Shell, Chevron and Petrobras have paid for existing geological information on 11 shallow-water blocks and three deep-water blocks, people familiar with the matter said. $20,000.
Chevron’s main interest is access to Guyana’s geological data, three of the people said, noting that the company has blocks in neighboring Suriname and Venezuela.
Exxon and Qatar Energy said they were awaiting full contract terms to consider bids. Shell said it was evaluating the offshore lease sale for possible participation. Chevron and Petrobras did not respond to requests for comment.
Guyana has also begun direct negotiations with the government, which owns the state-controlled oil company, over the 14 blocks and others. Guyana may also reclaim 20 percent of Exxon’s largest block and resell it in the future.
Jagdeo told Reuters last month that the Guyana government wanted companies like Qatar Energy to both participate in the April auction and engage in direct negotiations.
Schedule delay
Guyana plans to release a new production sharing agreement (PSA) model for leasing offshore blocks by the end of this month, a few weeks later than originally planned. A draft proposal, which was due for a two-week public consultation earlier, missed its February 13 release.
The auction will accept bids until April 14. Jagdeo said that according to the bidding round plan, after evaluation, the winner will be revealed in late May to early June.
The proposed rules would nearly double the government’s share of royalties and profit oil from oil production to 27.5 percent, plus a new 10 percent corporate tax, compared with Exxon’s main contract.
The new agreement will also require producers to provide Guyana with more information, the Vice President said.
“We think it’s asymmetrical right now and it’s kind of in favor of the company,” Jagdeo said. “We want more information from oil and gas companies.”
The new deal would require companies to deduct details of production costs before sharing oil revenues with the state, he said. Exxon can now use 75% of its oil production to offset various costs, including building its new Guyana headquarters.
The oil model will also introduce stricter terms for tenders and procurement, covering everything from production vessels to drilling suppliers. However, the terms will not affect Exxon’s Stabroek block.
“We will not renegotiate Stabroek,” Jagdeo said. “We don’t want to lose momentum.”
