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Guyana’s oil attracts international interest

Oil Rig

Reuters reports sources familiar with the oil industry as saying that the forthcoming bidding round for Guyana’s offshore areas is piquing the interest of oil companies in Asia, India and Europe.

A consortium led by ExxonMobil, the maker of Mobil lubricants like gear oil, is currently the only player in Guyana. It has already discovered some 11 billion barrels in recoverable crude oil reserves, which ExxonMobil plans to exploit with at least seven vessels. As it expands its fledgling oil sector further, the Government of Guyana is hoping to attract a wider range of oil companies to develop its hydrocarbon resources, although ExxonMobil may also consider bidding for the new blocks.

Something that will ultimately determine the attractiveness of the new blocks will be the new model the government is developing to address some of the problems it experienced with previous licenses, such as by requiring bidders to submit work programmes and stick to them. Bharrat Jagdeo, the Vice President of Guyana, said about this last year:

“We want a greater turnover. This is trying to solve a lot of the problems we have had with other areas where people just sat on these and then they relinquished them after a long period.”

The licensing round for 11 shallow-water and three deep-water blocks is expected to begin in April, with bids being awarded by the end of the second quarter. Companies can bid for as many blocks as they like, but no one company will be awarded more than three blocks.

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