Energy Department not issuing oil blocks

DPI, Guyana, Wednesday, November 6, 2019

“The Department [of Energy] has taken a conscious decision not to issue any oil blocks.”

This was stated by the department’s Director, Dr. Mark Bynoe during a media briefing at the National Communications Network’s (NCN) studio on Wednesday.

Director of the Department of Energy, Dr. Mark Bynoe.

The Energy Director explained that specific measures have to be implemented before the department begins releasing oil blocks.

“[One] We need to enhance the legislative framework so we will not be going to market until that framework is more robust. Two, we have been on record as indicating the need to revise the production sharing agreement because there are elements of the basin that has now been de-risked so Guyana has more favourable terms going forward. Three, we have also indicated the need to do 2D and 3D seismic shoots so that we understand the ‘prospectivety’ that is there, so it will allow us to then issue blocks in a specific quadrant.”

Dr. Bynoe stated that at the moment, there are still some uncertainties about what lies in Guyana’s continental waters. He noted that the Energy Department had issued tenders and received several bids which are currently being evaluated to do the 2D and 3D seismic.

He emphasised that until all these steps are taken, the department will not be issuing any oil blocks. “Realistically speaking, we’re looking at late 2020, early 2021,” he said.

The department is working on a model contract which it wants to complete before issuing any further exploration licenses. This model contract will be used for future Petroleum Sharing Agreements (PSA). The department is also developing a “model toolkit to allow for probabilistic scenario modelling of current and future PSAs”.