– Trotman says big names in oil industry have expressed interest
With a number of big names in the oil industry lined up to drill for oil in Guyana’s waters alongside applications from local companies, Government has announced there is a standing moratorium on new oil exploration licences.
Natural Resources Minister Raphael Trotman made this known to the Natural Resources committee of the National Assembly on Friday, when he was called upon to give a report on the sector.
This moratorium does not include United Kingdom-based company Tullow Oil. Tullow is the operator of the Orinduik Block, with a 60 per cent interest; while Eco Atlantic Oil and Gas is its partner with the remaining 40 per cent interest. The block is located in the shallow waters of the prospective Suriname-Guyana basin.
“Tullow submitted its application before elections,” Trotman explained. “The Government considered that we should honour that because the agreement was negotiated prior to the change of Government. We gave the right to Tullow to proceed as they had agreed with the Government previously.”
“Outside of that, we have enforced a solid moratorium. We want to know we have control and a sense of definition about what it is we are dealing with. 3.2 million barrels of oil is a major volume and billions of US dollars.”
The Minister noted that Government has received applications from French multi-national company Total, Italian company ENI, United States Company Chevron, Spanish company Repsol and even local companies. In addition, Trotman revealed that they are in discussions with Brazilian State-owned oil company Petróleo Brasileiro (Petrobras).
“Government recognises that the time will come when we will have to issue new licences,” he said. “But we intend to do so through the benefit and assistance of an international law firms. So we have worked up a list of law firms that do this.”
Oil companies
In a relatively short period of time, Guyana has become a hot bed of oil exploration activity. The most popular example of this is ExxonMobil’s affiliate, Esso Exploration and Production Guyana Limited which has to date, made a number of oil discoveries.
This company’s domain is the Stabroek Block, which is 6.6 million acres. While Esso Exploration and Production Guyana Limited is the operator and holds a 45 per cent interest in the Stabroek Block, Hess Guyana Exploration Ltd holds a 30 per cent interest, and CNOOC Nexen Petroleum Guyana Limited holds a 25 per cent interest.
There is also Ratio Guyana, which is in a joint venture partnership with EEPGL in the Kaieteur Block, offshore Guyana. Ratio Guyana Limited has a 25 per cent stake in the Kaieteur Block. Ratio Energy Limited has another 25 per cent of the Kaieteur Block while EEPGL has a stake of 50 per cent.
Meanwhile, the Orinduik oil block has been under the administration of Eco Guyana and Tullow since they signed a 10-year Petroleum Prospecting licence and Production Sharing Agreement with Government in 2016.
CGX Resources Incorporated, a Canadian oil company, is another major player in the local industry. CGX’s entire portfolio is focused on Guyana, in both the onshore and offshore basins.
The company has stakes in blocks located offshore and onshore of Corentyne, Berbice and Demerara. The Corentyne licence applies to 1.5 million acres, while the Demerara licence one million acres. Both of these operations are fully owned by CGX.
Onshore, the company holds a majority stake in the Berbice Block, through the ON Energy joint venture, owned 62.5 per cent by CGX Energy and 37.5 per cent by local investors.
Following on the heels of the parliamentary Opposition urging Government to auction the remaining oil blocks, something its own Advisor, Dr Jan Mangal had recommended, Government had stated that a process of both direct engagement and select bidding would be used to allocate Guyana’s remaining oil.
