Guyana to launch bidding for offshore oil blocks in two weeks 

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Vice President, Dr. Bharrat Jagdeo

The auction which was initially planned for September of this year was delayed due to additional preparatory steps that had to be taken. However, Vice President, Dr. Bharrat Jagdeo on Friday announced that the Government would begin relinquishing the oil blocks within two weeks.

The auction is expected to run for five months. Under the new Production-Sharing

Agreements (PSAs) introduced by the Government, Guyana is expected to benefit

from 10% royalty, 50/50 profit sharing, 65% cost ceiling and 10% Corporation tax.

The fourteen blocks would range from about 1000 square kilometers to 3000 square kilometers, with the majority of them being closer to 2000 square kilometers.  Eleven

of the oil blocks are located in shallow areas while three are in the deep sea.

The Government hired IHS Markit Consulting Services to advise on competitive

levels for rolling out the auction and strengthening the Petroleum Sharing

Agreements, among other things.

Local and international companies can participate in the bidding process which has minimum technical qualifications. The financial requirements include signing bonuses of no less than $10M for the shallow blocks and $20M per block in the ultra-deep areas.

Bidders are required to establish a work programme which will be examined along with a signing bonus by the Government when awarding the bids.

Each company will be awarded a maximum of three blocks, the Vice President informed.

“The criteria for accessing the bids will be weighed between the price and the work programme, so the work programme will have to hold them and have a guarantee that they will actually meet the work programme,” he explained.

Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel

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