The Government of Guyana has officially announced the recipients of oil block awards for the nation’s deep and shallow water blocks, which were auctioned during the 2022 Licensing Round. Vice President Dr. Bharrat Jagdeo made this announcement during his weekly press conference today noting that Sispro Inc., a Guyanese woman-led company, has secured both a shallow and a deep water block.
See full list of oil block awards:
– S3 Block to SISPRO INC (Guyana)
– S4 Block to Total Energies EP Guyana BV, Qatar Energy International E&P LLC, Petronas E&P Overseas Ventures SDN BHD (Malaysia)
– S5 Block to International Group Investment Inc
– S7 Block to Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited
– S8 Block to Exxon/Hess/CNOOC
– S10 Block to International Group Investment Inc
– D 1 – Delcorp Inc Guyana, comprising Watad Energy and Communications Limited & Arabian Drillers of Saudi Arabia
– D 2 – SISPRO INC (Guyana)
The 2022 Licensing Round, Guyana’s first-ever auction, was initially announced in December 2022 by President Irfaan Ali. After several extensions and updates to the fiscal framework, the auction concluded with six bidders submitting 14 offers for eight of the 14 oil blocks offshore Guyana.
In terms of the next steps, Jagdeo explained that the government will initiate contract negotiations with the awardees. It’s important to note that the new Production Sharing Agreement (PSA) and fiscal terms will remain largely unchanged, with some potential for minor adjustments during the negotiations.
Under the new Production Sharing Agreement (PSA), Guyana stands to gain substantial benefits, including a US$20 million signature bonus for deep-water blocks and US$10 million for shallow-water blocks. Additionally, there is a fixed 10% royalty rate, a 10% corporate tax, and a lowered cost recovery ceiling of 65%, down from the previous 75%.
With the government now poised to enter into negotiations with the awarded companies, Guyana Standard understands that this critical phase will entail establishing the terms and conditions that will govern the exploitation of these oil blocks. The significance of these discussions lies in ensuring that both the government and the companies can collaborate effectively to harness the country’s oil resources for mutual benefit.
Jagdeo also highlighted the importance of confirming that the companies possess the necessary financial resources to fulfill their commitments, specifically the signing bonuses. These bonuses, set at US$10 million for shallow blocks and US$20 million for deep-water blocks, represent a substantial financial commitment and a key prerequisite for advancing the oil exploration and production projects in Guyana.
