Auction for shallow and deep-water oil blocks offshore Guyana finally begins.

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President Irfaan Ali

The auction for fourteen shallow and deep-water oil blocks offshore Guyana was officially launched on Friday by President Irfaan Ali.

The President stated that the move is timely and fulfills the country’s aim to enhance oil and gas production in order to generate more revenues for development of Guyana, while also ensuring greater transparency and value for money. 

He said the closing date for the submission of bids is April 14, 2023 and contracts are expected to be awarded by the end of May, 2023. The Head of State announced that the Government implemented new fiscal terms and conditions, which bidders must abide by, as a means of ensuring that Guyana substantially benefits from the process. 

“It is very important for us to have developers who are serious and will in an expeditious way, move towards the development of the oil and gas resources so, strong contractual commitments are in place in this bidding round with strong relinquishment obligations,” he underscored. 

The Head of State added that a minimum signature bonus threshold of US$10 million and US$20 million, respectively, applies to shallow water and deep-water oil blocks. Additionally, bidders will be required to pay a US$20,000 participation fee. Bidders will be given access to a virtual data room, which is a key component of the bidding process, after making that payment.

Guyana is anticipated to gain from 10% royalty, 50/50 profit sharing, a 65% cost ceiling, and 10% corporation tax under the new Production-Sharing Agreements (PSAs) approved by the Government for the auction.

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