Guyana launches new bid round for offshore oil blocks

(Loop) Fourteen oil blocks in Guyana’s lucrative offshore oil and gas fields are now up for grabs, as the government has opened a new round of auctions.

In announcing the start of the auction this morning, President Dr Mohammed Irfaan Ali said his government plans to complete the bidding process by April 14, 2023 and have contracts signed by the end of May 2023.

Ali said this new bid round and subsequent contracts takes into consideration all of the lessons learnt from the controversies that arose as a result from the Stabroek block contract.

“What we are seeking to do is to have the best possible outcome for Guyana, given the lessons we have learnt,” Ali stated. 

The 14 blocks are located in both deep and shallow water. Given the differences associated with exploration and production at each depth, there will be separate requirements that must be met for a successful bid in each category.

There will be a minimum signature bonus requirement of US$10 million for shallow water and US$20 million for deepwater blocks.

There is also a participation fee of US$20,000 to gain access to the virtual data room.

The minimum work commitments specified for the initial and renewal periods of the prospecting licence consist of a combination of seismic and drilling of exploration wells with the fulfilment of prior commitment as a precondition to enter into the subsequent renewal periods.

Ali said Guyana is looking for companies that have the capacity to develop the oil and gas blocks in an “expeditious” manner.

“We have a situation where there is a timeframe on oil and gas development. We understand the direction in which the world is going so it is very important for us to have developers who are serious, who will in an expeditious way move towards the development of the oil and gas resources so strong contractual commitments are in place during this bidding round with strong relinquishment obligations,” the president stated.

Ali noted that Guyana is mindful of the constraints that currently exist on the financial market with regards to funding large projects like oil developments and the contracts seek to find a balance that is beneficial to both Guyana and investors.

In seeking to woo investors, Ali highlighted that Guyana’s offshore blocks are some of the fastest growing with resources estimated to be over 25 billion barrels of oil equivalent (boe) and an estimated reserve in excess of 11 billion boe.

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