Vice President, Dr. Bharrat Jagdeo has officially confirmed the expiration of the prospecting licence held by Spanish oil company Repsol for the Kanuku Block, adding that it is seeking a renewal. During his weekly press conference held today, Jagdeo provided an update on concerns previously raised by journalists regarding the company’s licence status.
Last week, when journalists enquired about the expiration of Repsol’s licence, Jagdeo had expressed a lack of awareness. He had emphasized that the Guyana Geology and Mines Commission (GGMC) maintains a comprehensive record and timeline encompassing all exploration and drilling endeavors. According to this schedule, no company, with the exception of CGX, had encountered termination or depletion of their entire prospecting license.
While noting his intention to verify the information with the GGMC, Jagdeo was able to provide a definitive update this week.
Repsol and the Government of Guyana inked a Petroleum Agreement on May 14, 2013. As per the stipulated terms, Repsol’s prospecting license was set to expire in May 2023. Jagdeo confirmed that the license indeed expired in May of this year, leading to Repsol submitting a renewal request. He stated, “I can confirm that it was 10 years, the 10 years had expired. So, in May effectively the property was back with the Government of Guyana.”
Jagdeo emphasized that a policy decision on the licence renewal remains pending at the cabinet level. If the decision is made to grant the renewal, Repsol will need to adhere to the provisions under the new model Production Sharing Agreements (PSA). This revised PSA includes various provisions, such as the introduction of a signing bonus for the block, a reduction in the block’s size, and the application of all other conditions, including enhanced royalties and additional fiscal terms.
During the press conference, Vice President Jagdeo also fielded questions about Repsol’s determined pursuit of license renewal, given the absence of substantial discoveries in the block over the course of the 10-year licence. He responded by highlighting Repsol’s likely recognition of potential discoveries within the block from the 3D seismic surveys in its possession and their substantial monetary investments in the area, which they may be reluctant to forfeit.
