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Exxon Discusses Returning Unexplored Offshore Oil Blocks To Guyana

ExxonMobil and the government of Guyana are discussing which unexplored offshore blocks the U.S. supermajor should return to the country under its 2016 exploration and production contract, Reuters reported on Wednesday, quoting sources close to the talks.

Under the original contract from 2016, Exxon should return in 2023 a total of 20% of the offshore acres that have been awarded to the Exxon and Hess Corp-led consortium and that have remained unexplored to this date.

Areas will include some parts of the Stabroek block, in which Exxon has made the biggest discoveries offshore Guyana so far. 

Exxon is in “ongoing discussions with the government regarding these requirements, in respect to both timing and area,” a spokesperson for the U.S. supermajor told Reuters.

The government of Guyana wants to welcome more foreign operators to its already booming oil industry after huge finds from the Exxon-Hess consortium made it the newest oil producer in 2019. Guyana is set to hold its first-ever offshore licensing round this year. In April, the government pushed the deadline for receiving bids from mid-April to July 15, in response to industry feedback and the “advanced pace of modernising the oil and gas regulatory framework.”  

The government is developing a new model for Production and Sharing Agreements (PSA). Last week, Guyana’s Vice President Bharrat Jagdeo told Reuters that the oil auction was further pushed by one month, to the middle of August, to finalize the PSA model and regulations that go with it.

Supermajors Shell and Chevron, as well as Brazil’s state oil firm Petrobras, are reportedly among the 10 companies considering bidding in the licensing round.

Guyana has become a hotspot for exploration and development in recent years after Exxon and Hess found more than 11 billion barrels of oil equivalent offshore the South American country.  

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Currently, Guyana produces around 360,000 barrels per day (bpd) of crude, all from Exxon-operated wells. 

By Tsvetana Paraskova for Oilprice.com

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