Guyana to complete new oil contract model by Q2 as auction looms (updated)

Avante

14/02/2023 21:02

(Recasts with vice president's comments, changes throughout)
    By Sabrina Valle
       GEORGETOWN, Feb 14 (Reuters) - Guyana expects to
finalize a new oil production-sharing agreement model on time
for an auction that will collect bids through mid-April, the
country's vice president told an energy conference on Tuesday.
    The South American country has emerged as one of the hottest
offshore areas in decades with as much as 25 billion barrels of
oil and gas. The country for months has promised to deliver new
contract terms, but has been repeatedly delayed. 
    Oil ministers and executives are in Guyana this week to
learn more about 14 oil and gas exploration blocks on offer.
Vice President Bharrat Jagdeo told attendees a new contract
model would be available in late March or early in the second
quarter. 
    "We want multiple numbers of investment groups coming in
here because then you can start the exploration activities
simultaneously," Jagdeo said. 
    The country is also considering allocating extra blocks to
countries including Brazil, Qatar and India through bilateral
agreements, he said. Guyana has been in talks with the United
Arab Emirates and the United Kingdom, President Irfaan Ali said
last month in India.
    Liam Mallon, president of Exxon Mobil's oil and gas
production business, earlier told Reuters an Exxon-led
consortium was not ready to consider adding to its sizeable
exploration territory in Guyana until terms are disclosed. 
    INCREASED OUTPUT
    The Exxon group including Hess Corp  HES.N  and CNOOC Ltd
 0883.HK  has the capacity to increase output in Guyana to as
much as 400,000 barrels of oil and gas per day (boepd) by
optimizing operations at its two production vessels, Mallon
said. 
    Their two vessels, Liza Destiny and Liza Unity, currently
produce 380,000 boepd, above the 340,000 originally planned. 
Exxon is working to more than triple Guyana production to 1.2
million barrels per day by 2027 and may go beyond that, Mallon
said. 
    A third vessel, Prosperity, is expected to depart Singapore
shortly. The consortium plans six floating production storage
and offloading vessels with combined capacity to produce over
1.2 million boepd by the end of 2027.    
    "We have to put our resources where we think the biggest
opportunities are," Mallon said. 
    INDIA, QATAR ARRIVE 
    Guyana is using this week's conference to highlight next
quarter's auction which could potentially double its offshore
area under exploration. 
    Oil industry contingents from India, the United Arab
Emirates, Qatar and the United States were on hand to hear
Jagdeo and Ali discuss their goals for the lease sale. Like
Exxon, many executives are hoping to learn precise terms before
deciding whether to invest billions of dollars.
    "At the end of the day, you are investing in deepwater
developments, you are investing a lot of money upfront," Mallon
said of the risks involved. But he added: "We are still
relatively early in the exploration phase."
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Guyana to auction 14 offshore oil and gas exploration blocks    
https://graphics.reuters.com/GUYANA-OIL/CONFERENCE/gkplwdeddvb/
Blocks on offer for Guyana's 2023 licensing round    https://tmsnrt.rs/3K7dcB1
Blocks on offer for Guyana's 2023 licensing round    https://tmsnrt.rs/3XtH6Cj
Blocks on offer for Guyana's 2023 licensing round    https://tmsnrt.rs/3K8P0xY
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Sabrina Valle; Editing by Robert Birsel and Josie
Kao)
 ((sabrina.valle@tr.com | Twitter: @sabrinavalle))