Booming Guyana Sets Offshore Oil Auction Under Revamped Fiscal Terms
11.04.2022 By Ella Keskin - NEWS

November 04, 2022 [Reuters] – Guyana, one of the world’s hottest oil drilling zones, will offer 14 offshore exploration blocks under terms that “significantly” increase its share of oil revenue, the South American nation’s vice president said on Thursday

Officials this week approved an oil lease auction with timing details to be disclosed by the Ministry of Natural Resources. The auction will include three deepwater and 11 shallow-water exploration blocks, Vice President Bharrat Jagdeo said in an address.

A new profit-sharing agreement that will cover future oil production agreements is under development and will be finalized before the auction ends, he said. It will include a 50/50 split of oil profits and tack on a 10% royalty rate and a 10% corporate tax rate, Jagdeo said.

Contract terms “shift significantly” the revenue split, with Guyana receiving a “greater share of the proceeds” compared to the existing Production Sharing Agreement terms, Jagdeo said. But they should accelerate the tiny country’s oil boom by bringing in new producers.

A group led by Exxon Mobil (XOM.N) that includes Hess Corp (HES.N) and China’s CNOOC Ltd (0883.HK) has discovered 11 billion barrels of recoverable oil in a 6.6 million acre (26,800 sq km) block off the country’s coast. That agreement has been criticized for providing Guyana, an impoverished nation of fewer than 800,000 people, with only about 15% of oil revenues – including a 2% royalty rate.

Oil producers can bid for as many blocks as they wish, but no more than three blocks will be awarded to any one company. Each bid must include a development plan that will be considered along with the financial bid, Jagdeo said.

Winning bidders must pay a $10 million signing bonus for shallow water blocks and twice that for deepwater awards, he said. They also will be required to put up a guarantee of at least 20% of the work development plan.

 

 


Pro Trial: Access 11,340 Tank Terminal and Production Facilities

11,340 tank storage and production facilities as per the date of this article. Click on the button and register to get instant access to actionable tank storage industry data

Sempra Targets Cameron LNG Expansion FID in H1 2025
02.29.2024 - NEWS
February 29, 2024 [LNG Prime]- US LNG exporter Sempra Infrastructure, a unit of Sempra, expects t... Read More
Gastrade: Greece’s first FSRU to Start Commercial Ops by End of April
02.29.2024 - NEWS
February 29, 2024 [LNG Prime]- Greece’s Gastrade expects to launch commercial operations at its... Read More
NFE Expects to Launch Altamira LNG Production in March
02.29.2024 - NEWS
February 29, 2024 [LNG Prime]- US LNG firm New Fortress Energy expects to start production of liq... Read More
Commonwealth LNG Pushes Back FID to H1 2025
02.29.2024 - NEWS
February 29, 2024 [LNG Prime]- Commonwealth LNG has postponed a final investment decision on its ... Read More