GEORGETOWN, Guyana, CMC- The Government of Guyana has received eight bids for 14 of the oil blocks upon the conclusion of Guyana’s first round of competitive offshore oil and gas licensing auction.
The People’s Progressive Party’s (PPP) General Secretary, Vice President Dr. Bharrat Jadeo, revealed this on Thursday.
Jagdeo, also responsible for the petroleum sector, has expressed that the government is very pleased with the offers received.
He spoke at a press engagement at Freedom House, Robb Street, Georgetown.
According to Jagdeo, bids still need to be received for the D3, S1, S2, S6, S9, and S11 oil blocks offshore Guyana.
However, “We’re very pleased with the offers that we’ve had from the bid round, which closed a few days ago. As you know, we received bids for eight of the 14 blocks, and there were 14 offers in total from six bidders. That means some of the blocks are very competitive,” he disclosed.
According to Jagdeo, it is essential to understand the global context in which the auction was launched, as countries are now moving to net zero, and financing for petroleum explorations is becoming scarce.
Also, bid rounds are hosted in highly advanced countries compared to the small-producing oil nations.
On the internal side of things, the general secretary explained, Guyana now has a new Production Sharing Agreement (PSA), which increased the royalty rate from two to 10 percent. In comparison, a 10 percent corporate tax has been implemented.
The cost recovery has also remained at 65 percent for oil companies in Guyana’s petroleum industry.
“This is a new factor here now. And then in the Petroleum Activities Bill, we’ve now put in a signing bonus, a requirement to have a work plan and a budget for that work plan, and three, a penalty for failure to achieve the work plan,” he added.
Despite the government’s stringent regulatory measures, the Ministry of Natural Resources has received eight offers from companies, including from the USA and the United Kingdom.
“Just imagine this bid round taking place under the old conditions. We would have had all 14 of the blocks immediately taken out. It’s a very different context from the Guyana of 2016 when Trotman (Raphael Trotman) signed that agreement.”
“We kept that commitment. This is a transparent process for allocating blocks. Secondly, we said we will not complete the bid round unless we have a framework – a Production Sharing Agreement (PSA) and a new Petroleum Activities Bill and we kept those commitments,” Jagdeo emphasized.
The general secretary noted that the evaluation of the bids will be completed before the end of the year.
Through the Ministry of Natural Resources, the government launched the first-ever competitive offshore oil and gas licensing round in December 2022 with an April 2023 deadline.
However, it was extended to June, July, and September 12 as the administration moved to advance the sector regulatory framework to ensure accountability and transparency.
Of the 14 blocks, ranging from acreages of 1,000 square kilometers to 3,000 square kilometers, 11 are located in shallow water, while the remaining three can be found in ultra-deepwater.
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