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European and Indian oil companies are reviewing the terms of Guyana’s first-ever licensing round as they consider bidding in the process that will award 14 shallow and deepwater offshore blocks in May 2023, Reuters reports, quoting sources with knowledge of the matter.
Last month, Guyana launched its first licensing round for offshore oil and gas exploration and production, which is expected to offer a different model of production sharing agreements than the ones in place with U.S. supermajor ExxonMobil, the first and biggest oil producer operating in Guyana.
The government of Guyana says it is developing a new model to “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.”
Despite the still unfinished job with the new PSAs, companies from India and Europe are considering bidding in the round, hoping to obtain acreage in the world’s newest oil hotspot.
ONGC Videsh, the overseas investment arm of Indian state-run Oil and Natural Gas Corporation (ONGC), is considering a bid for some of the blocks up for grabs, while refiner Indian Oil Corporation evaluates working in Guyana in collaboration with ONGC Videsh, according to Reuters’ sources.
Guyana has become a hotspot for exploration and development in recent years after Exxon and its partners found more than 11 billion barrels of oil equivalent offshore the South American country.
Exxon helped make Guyana the latest oil-producing and oil-exporting nation in late 2019. Since 2015, when it first discovered oil offshore Guyana, Exxon has made more than 20 discoveries offshore Guyana.
By 2027, Exxon plans to produce more than 850,000 bpd of crude oil from Guyana’s offshore, the U.S. supermajor said in a presentation on its investor day in March 2022. Guyana is a strategically important development for Exxon this decade, together with the U.S. Permian Basin, Brazil, and LNG projects around the world, Exxon said last month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.