Despite the government’s ongoing efforts to finalize the terms of the auction, leading energy corporations from Asia and Europe are reportedly interested in Guyana future round of bidding for offshore territories.
The South American nation aims to fast grow its oil industry and enlist investors to balance out a consortium led by Exxon Mobil Corp (XOM.N) that currently controls all production. In order to access the more than 11 billion barrels of oil discovered so far, the Exxon group has laid out plans to put at least seven boats. The state-run Oil and Natural Gas Corp (ONGC.NS), which has 14 exploration blocks available, is considering making a bid for some of them, according to ONGC Videsh (ONVI.NS), the foreign investment arm of India.
According to two people familiar with the discussions, refiner Indian Oil Corp (IOC.NS) is also considering working in Guyana in conjunction with ONGC Videsh.
Irfaan Ali, the president of Guyana, visited India this month and invited energy businesses to take part in the auction. A few days later, he extended the same invitation to Chinese corporations. According to officials, Guyana may take into account giving key partners direct land allocations through government-to-government agreements.
A spokeswoman said in a statement that “ONGC Videsh continues to consider, evaluate, and process many global business possibilities.” We refrain from commenting on specific opportunities until there are firm agreements in place, both out of respect for confidentiality and as a matter of policy.
IOC declined to comment when contacted
Three deepwater and 11 shallow-water blocks, each totaling 2,000 square kilometers, are being offered by Guyana (722 sq miles). The opening of bids is anticipated for April in Georgetown.
Two other persons with knowledge of the situation indicated that several European businesses have recently looked into the rules of the auction in order to contemplate bidding.
According to Alistair Routledge, the company’s national manager for Guyana, Exxon is thinking about making a bid on the blocks. In an interview with Reuters, Routledge said, “Of course, we will look into it.
The details of a new production sharing agreement (PSA) that Guyana has signed that is distinct from the one it previously had with the Exxon consortium for its 26,800 sq km Stabroek block must be clarified before many bidding decisions can be made.
In light of incomplete contract text, the necessity for legislative amendments to reflect the new framework, and ongoing work to plan the auction, oil analysts and experts said they do not anticipate the new PSA model to reach a deadline of January 31.
The licensing phase will be open through April 14 and winning bids will be chosen by the end of the first half of the year, according to Guyana’s finance minister, Ashni Singh.
IHSMarkit, a U.S. company, was chosen as the auction’s principal consultant last year.
Guyana has not set a cap on the number of blocks that corporations might bid on, but it will only allow three awards per company, in an effort to draw more businesses into the auction.
The bids of the winners must include job programs, along with guarantees for those labor programs. The government may levy fines or take back land for future auctions if winners do not complete the investment projects as needed.
Guyanese Vice President Bharrat Jagdeo stated in November, “We want a bigger turnover.” “This is attempting to address many of the issues we have had with other regions where people simply sat on these and then abandoned them after a considerable amount of time,” the author said.
With the addition of their second production vessel in 2017, Exxon, Hess Corp (HES.N), and China’s CNOOC (0883. HK) increased oil output and exports. The enhanced output started shortly before the world’s demand picked up speed in the wake of Russia’s invasion of Ukraine and the sanctions that followed.