Oil giants eyeing Guyana’s oil fields
2023.03.06 04:03
Oil giants eyeing Guyana’s oil fields
By Tiffany Smith
Budrigannews.com – At least ten businesses, including Shell (LON:), have signed up for Guyana’s upcoming auction of offshore oil exploration blocks. According to people familiar with the situation, Petrobras and Chevron should be considered for the decade’s hottest oil region.
In an effort to speed up economic growth and lessen the influence of an Exxon Mobil-led consortium in the country’s oil sector, the South American nation is offering 14 offshore blocks. It is anticipated that the winning bidders will be selected next month.
On Monday, Guyana Vice President Bharrat Jagdeo will give a speech at the CERAWeek energy conference in Houston to garner support for the first round of competitive bidding in the nation.
“For our people, we see this as significant and transformative. He said, “We are in a mad rush to get this done before net-zero comes,” referring to the goal of significantly reducing the use of fossil fuels by 2050.
While in Houston, he intends to meet with representatives of the U.S. government as well as international and state-run oil companies.
According to the government, companies interested in the April round have paid for seismic data to evaluate the blocks and decide whether to make an offer. Energy Minister Vickram Bharrat stated that they include six major international producers without naming the companies.
None of the organizations have settled on offers as they trust that the public authority will deliver contract terms, individuals acquainted with the matter said.
Off its coast, Guyana believes it has up to 25 billion barrels of oil and gas. a group consisting of Exxon Mobil (NYSE:), NYSE: Hess likewise CNOOC (NYSE:) operates the most important part of the country, the 6.6 million-acre (26,800-square-kilometer) Stabroek block, which has seen more than 30 discoveries thus far.
Chevron Corp., Exxon, QatarEnergy, Shell PLC According to the sources, Petrobras is one of the major oil companies that has paid $20,000 to obtain a copy of the geologic data for the 11 shallow water and three deep water blocks.
Three of the sources stated that Chevron’s primary goal is to gain access to the geological data of Guyana, noting that the company also owns blocks in Suriname and Venezuela.
Exxon and QatarEnergy have said they are hanging tight for the full agreement terms to think about a bid. Shell, Petrobras, and Chevron did not respond to inquiries for comment.
Additionally, Guyana has initiated direct negotiations with governments that have state-controlled oil companies regarding the 14 blocks and other areas. Additionally, Guyana may offer up to 20% of Exxon’s largest block again in the future.
According to what Jagdeo told Reuters last month, the Guyanese government expects companies like QatarEnergy to both bid on the auction in April and engage in direct negotiations.
Guyana intends to issue a new Production Sharing Agreement (PSA) model for leasing offshore blocks by the end of this month, which is several weeks behind schedule. These blocks are being offered for Guyana’s licensing round in 2023. The February 13 release of a draft proposal that was scheduled for a two-week public consultation was postponed. The date of the auction is April 14.
Compared to Exxon’s main contract, the proposed rules will nearly double the government’s take from oil production to 27.5% of royalties and profit oil, plus a new 10% corporate tax.
The vice president stated that the new PSA will also require producers to provide Guyana with additional information.
According to Jagdeo, “We believe it is asymmetric now, and a bit in favor of the companies.” We require additional information from the oil and gas companies.”
He stated that the new PSA will ask for specifics about the production costs that businesses deduct before sharing oil revenue with the nation. The Exxon company is able to offset a number of expenses, including the construction of its new headquarters in Guyana, by using 75% of the oil production.
Tendering and procurement will also be subject to more stringent rules under the oil model, which will apply to everything from drilling suppliers to production vessels. However, Exxon’s Stabroek block will not be affected by the terms.
Jagdeo stated, “We are not renegotiating Stabroek.” We don’t want to fall behind.
Exxon increases Guyana’s oil production Exxon increases Guyana’s oil production,
