Guyana launches First Licensing Round for Offshore Oil and Gas Exploration and Production
Highlights
▪ 14 blocks for tender for shallow water and deepwater areas combined
▪ Contractual commitments and relinquishment obligations to ensure expeditious development of oil and gas resources
▪ Improved fiscal terms that provide a greater balance of the share of revenue
between the government and contractor while maintaining Guyana’s competitive
edge in the region and globally
▪ Transparent process that imposes minimum qualification criteria that reflect the international best practices and the expertise and capital requirements necessary to conduct exploration and production activities in shallow and deepwater areas respectively
▪ Separate requirements for qualification to participate in deepwater versus shallow
water blocks for tender with a higher bar set for deepwater areas, which reflects the capital-intensive nature of deepwater exploration and production (E&P), and the highly specialised technical competence required for deepwater E&P activities
▪ Minimum signature bonus requirement of US$10 million for shallow water and
US$20 million for deepwater blocks for tender
▪ Minimum work commitments specified for the initial and renewal periods of the prospecting licence consist of a combination of seismic and drilling of exploration wells with fulfilment of prior commitment as precondition to enter into the subsequent renewal periods
▪ Participation fee of US$20,000 is payable in respect of a block for tender in order
to gain access to the virtual data room and participate in the competitive bidding process.
The Government of Guyana, today, for the very first time, is announcing the launch of a Licensing Round. The round offers 14 blocks for tender in the shallow and deepwater areas of Guyana’s offshore area.
This launch of the Guyana 2022 licensing round marks a new era of Oil and Gas development by the government, which is characterised by a competitive and favourable investment mechanism and improved socioeconomic benefits for our nation. The Government remains committed to a balanced approach of fast-tracking hydrocarbon
developments while advancing environmental protection, and ensuring that Guyanese derive the maximum economic benefits of our petroleum potential.
The competitive bidding round process, which is officially launched with the publication of the Notice given under the Petroleum (Exploration And Production) Act, in the Official Gazette by the Minister of Natural Resources on December 9, 2022 is expected to close with the submission of bids on 14th April 2023, and contract awards expected by 31st May
2023 following evaluation of bids and negotiation process as indicated in the Ministry’s
indicative terms and guidelines for the bidding round.
The Guyana offshore basin has captivated the attention of the global oil market participants. Now labelled as the gateway to the world’s fastest-growing super basin over the last four years, Guyana’s offshore is estimated to have potential resources in excess of
25 billion barrels of oil equivalent (boe) and an estimated reserve in excess of 11 billion boe. The licensing round represents an opportunity for international and local companies to access Guyana’s offshore acreages for future development in this emerging energy market. The licensing round importantly allows the Government of Guyana to create and administer an improved fiscal and regulatory framework that is driven on good international oil field practices and standards.
In preparation for the launch of the round, the Government of Guyana consulted international best practices and is offering a transparent and competitive process that takes into account the advances in the oil and gas sector, the current investment conditions regionally and globally, as well as in the welfare of the nation.
The indicative terms and guidelines for this competitive licensing round ensures that the qualification criteria for the shallow water and deepwater blocks for tender reflect the minimum financial capacity, technical competence as well as of health, safety, and environmental record necessary to engage in highly specialized and capital-intensive activity such as exploration for oil and gas offshore.
Moreover, the Government of Guyana is in the process of developing a new model production sharing agreement that will reflect the indicative terms and guidelines for the licensing round as well as introduce comprehensive provisions reflective of the developments in the oil and gas industry and international best practices observed in other jurisdictions.
The indicative terms and guidelines, and the new model contract will be opened for consultation and are expected to be finalized and published on 8th March 2022 through a Notice in the Official Gazette by the Minister of Natural Resources.
Prospective Participants of the Guyana 2022 Licensing Round should visit www.petroleum.gov.gy [https://petroleum.gov.gy/guyana-offshore-licensing-round-202223] and contact the Ministry of Natural Resources at licensinground2022@petroleum.gov.gy.