Guyana to reclaim 20% of the Stabroek oil block and remarket it by year-end

The Vice President of Guyana, Bharrat Jagdeo, has said that the country is planning to reclaim 20% of the Stabroek oil block responsible for several major discoveries from a consortium spearheaded by Exxon Mobil Corp and to remarket it by the end of the year.

Guyana to reclaim 20% of Exxon oil block

Over 11 billion barrels of oil and gas have been discovered in the block, measuring 6.6 million acres. Under the contract of the group, Guyana can reclaim the unexplored portions during the year.

Guyana is currently exploring a multi-pronged strategy that will reduce the control the consortium has over the oil resources in the country and trigger new oil production activities. The group produces 380,000 barrels of oil and gas daily from two projects in the Stabroek block.

The US-Chinese group plans to increase its oil output to 1.2 million barrels by 2027. Guyana, the least-developed country in South America, is planning to collect $1.63 billion in oil royalties and fees during the year. According to Jagdeo, the country needed more competition in the industry.

Last year, Jagdeo said that Guyana was planning to hire state-controlled oil companies to create new fields. The decision was to reclaim the existing Exxon block signals to support development. This comes amid criticism that the original deal created under the previous government was one-sided for oil companies.

Exxon fails to meet deadlines

The Exxon group has failed to meet investment deadlines for blocks yet to be explored or developed. Exxon must relinquish control over at least 20% of the contract area that has yet to be retained through an exploration or production license.

According to Exxon, the company and its Stabroek partners have complied with the Petroleum Agreement and the Petroleum Act, such as the requirements to relinquish acreage. A spokesperson from the company said they were holding discussions with the government about the requirements.

Guyana is currently exploring an auction of the exploration licenses of the 14 offshore blocks not situated within the Exxon domains in what will become the first competitive auction in the country. The country has also proposed offering blocks to other countries in Qatar, United Arab Emirates, and India.

The energy minister in the country also said that eight companies had paid to have geological data of the areas that are set to be auctioned during the next quarter. The data has attracted attention from Exxon and QatarEnergy.

Besides the auction of this data, Guyana has also held direct discussions with Qatar, the United Arab Emirates, and India regarding bilateral oil agreements. The agreements are under different terms from the ones given to private oil producers.

Jagdeo is also planning to work with Petroleo Brasileiro and the Brazilian government. According to Jagdeo, integration between Guyana and Brazil had been seen in the past, and he was hoping it would continue. Jagdeo said Guyana was waiting for the newly elected Brazilian president to settle in.