Guyana’s Offshore Oil Auctions Attracting Interest from Asia, Europe

Guyana’s upcoming round of auctions for its offshore oil and gas exploration areas has attracted interest from top energy companies of Europe and Asia, as the government continues to work out terms for the auction. Guyana wants to develop its oil industry and attract developers to counterbalance an Exxon Mobil-led consortium that currently controls all production in the country. The Exxon consortium has laid out plans to install at least seven vessels to tap into the more than 11 billion barrels discovered so far.

India’s ONGC Videsh, the overseas investment arm of state-owned ONGC, is considering a bid for some of the 14 exploration blocks up for bidding. Refiner Indian Oil Corp also wants to work in Guyana in collaboration with ONGC Videsh.

Guyana’s president Ali this month visited India to ask energy companies to participate in the auction, and made the same offer to Chinese companies days later. Guyana might consider allocating areas directly to strategic partners through government to government negotiations.

Guyana is offering three deepwater and 11 shallow-water blocks, each averaging 2,000 square kilometers. Bids are expected to be opened in April in Georgetown, the nation’s capital.

Several European companies have also been looking at auctions’ terms to consider bidding.

Exxon is also considering bids on the blocks.

The bidding decisions will likely depend on Guyana’s terms of a new production sharing agreement (PSA), which will be different from that signed with the Exxon consortium for the country’s 26,800 sq km Stabroek block.

While the new PSA model has a deadline of Jan. 31, there are issues of unfinished contract language, legislative changes needed to reflect the new framework, and work pending to organize the auction.

Guyana’s finance minister Singh said on Monday the licensing round will be open through April 14, with successful bids to be awarded by the end of the first half of the year.

To bring more companies into the auction, Guyana did not restrict the amount of blocks companies can bid for, but will limit the awards to three per company.

Last year, Exxon, Hess Corp and China’s CNOOC ramped up oil output and exports with their second production vessel. The increased output began just before the acceleration of global demand in the aftermath of Russia’s invasion of Ukraine and sanctions derived from it.

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