The upcoming auction of offshore oil exploration blocks in Guyana has attracted the attention of several major oil companies, including Shell, Petrobras and Chevron. This region is considered the hottest of the decade in terms of oil potential.
The objective: to accelerate economic development and reduce the dominance of Exxon Mobil
The South American country is proposing 14 offshore blocks in an effort to accelerate economic development and reduce the dominance of a consortium led by Exxon Mobil over its oil sector. The winning bidders are expected to be selected next month. Guyana’s vice president, Bharrat Jagdeo, is looking to mobilize support for the country’s first tender at the CERAWeek energy conference in Houston.
Direct negotiations
Guyana has also entered into direct negotiations on the 14 blocks and other areas with governments that have state-controlled oil companies. Guyana can also recover up to 20% of Exxon’s largest block and offer it again in the future.
Late schedules but new rules for production sharing
Guyana plans to release a new model production sharing agreement (PSA) for leasing offshore blocks by the end of this month, several weeks late. The proposed rules will nearly double the government’s take of oil production to 27.5% of royalties and oil profit, plus a new 10% corporate tax, compared to Exxon’s main contract.
