Guyana to select acreage for new auctions: Correction

Guyana will select acreage to offer for new production sharing contracts later this year.

Last month a government official told Argus the government would seek interest in the 11,200km² Takutu basin which lies 480km inland near the border with Brazil and the 26,800 km² ultradeep water Block C that is adjacent to the border with Suriname. But natural resources minister Vickram Bharrat later said a final decision has not been made as to which blocks will be offered in auction.

Exploration and production contracts granted by Guyana so far have been on a non-competitive basis, with direct negotiations between the government and international oil companies. Guyana will change this system to the auctioning of blocks in the third quarter of this year, the government said. The natural resources ministry has not yet set a schedule for the auction of the blocks.

All the South American country's oil has been produced from the ExxonMobil operated deepwater Stabroek block, but the country has "substantial acreage onshore and offshore that remains untapped," the investment office said.

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, Guyana's vice president Bharrat Jagdeo said in November in announcing the change in awarding production contracts.

"We have to decide, however, whether we should do seismic surveys before auctioning as this would increase the value of the blocks, or just auction the blocks as they are," Jagdeo said. "An alternative would be to vest all of these blocks into a national oil company."

ExxonMobil started production of 32.1°API Liza crude from the Stabroek block in December 2019. Its partners include US independent Hess and Chinese state-owned CNOOC unit Nexen.

Average output for this year is projected at 257,000 b/d, according to the government's budget plan. Three other Stabroek projects planned by ExxonMobil will raise output to over 800,000 b/d by 2026, the company has said.

By Canute James