October 27, 2023 [Oil Price]- Supermajors TotalEnergies and Exxon were among the bidders in a tender for a number of shallow-water oil and gas blocks offshore Guyana.
The tender involved 11 shallow-water blocks and three deepwater ones, Reuters reports, citing a statement from the Guyana government.
Each supermajor and their respective consortia bid for one block.
TotalEnergies led a consortium also including Qatar Energy, and Petronas, Malaysia’s state oil company. Exxon led the trio it formed with Hess and CNOOC earlier to explore offshore Guyana, tapping some 11 billion barrels in reserves to date.
The government of the South American nation announced its plans for a tender earlier this year as it sought to maximize the returns from its oil resources sooner rather than later worried that the energy transition push could affect demand for hydrocarbons.
The Guyanese government also changed the revenue-sharing terms for companies interested in exploiting its natural resources, which drew the ire of Exxon.
According to the head of the company’s operations in Guyana, the terms of the new production-sharing agreement fell short of what they could be.
The new PSA, released earlier this year, lifts the royalty rate from 2% to 10%, the profit tax rate from 12.5% to 17.5%, and introduces a new corporate tax rate of 10%. The new terms will apply to new projects and will not concern projects already underway such as the development led by Exxon in the Stabroek Block.
Apart from Exxon, no other bidder had any objections to the terms, Guyana’s Vice President Bharrat Jagdeo told the media.
“We may therefore have a situation where we may not be able to finalize with everyone because as you heard Exxon said they are not prepared to sign the PSA as it is currently structured,” Jagdeo said, as quoted by Reuters. “We have said if their demands are extreme then we will simply not proceed with the signing.”
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