<article><p class="lead">Guyana will begin auctioning offshore oil blocks in the third quarter of 2022, ending the current system of direct awards, vice president Bharrat Jagdeo said.</p><p>Exploration and production contracts granted so far have been based on direct negotiations between the government and international oil companies, including ExxonMobil, operator of the 120,000 b/d <a href="https://direct.argusmedia.com/newsandanalysis/article/2268499?keywords=guyana">Stabroek block</a>.</p><p>In preparing for the auction, the government will determine whether companies with existing contracts - such as ExxonMobil that operates a total of three deepwater blocks - should be excluded from the tenders, Jagdeo said last week.</p><p>The government will also decide whether it will invest in seismic surveys before the tenders, or auction the blocks without them.</p><p>The government has given itself a year to make these policy decisions, Jagdeo said.</p><p>The government plans to offer acreage that has been relinquished by incumbents, he said.</p><p>ExxonMobil started production of 32.1°API Liza crude from the deepwater Stabroek block in December 2019. Its partners include US independent Hess and Chinese state-owned CNOOC unit Nexen. Three other Stabroek projects planned by ExxonMobil will raise output from the block to over 800,000 b/d by 2026, the company has said.</p><p>ExxonMobil increased its estimated recoverable resources from Stabroek by 1bn bl of oil equivalent (boe) to 10bn boe, the company said last month.</p><p>Other companies that are part of consortiums with exploration and production contracts include France's TotalEnergies, UK's Tullow, Spain's Repsol, Qatar Petroleum, and Canadian firms CGX Energy, Frontera and Eco Atlantic.</p><h3>Yellowtail review</h3><p>In a related matter, the natural resources ministry and environmental agency EPA have started a review of ExxonMobil's development plan for the Yellowtail project on Stabroek.</p><p>Yellotail is forecast to deliver up to 250,000 b/d by early 2026, making it the biggest such project in the South American country.</p><p>Yellowtail will be preceded by Liza 2 that will start producing 220,000 b/d in 2022, with another 220,000 b/d anticipated from a third project - Payara - starting in 2024.</p><p class="bylines">By Canute James</p></article>
