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The world’s newest offshore hotspot, Guyana, is in the early stages of a probe into how oil exploration rights were awarded for oil blocks that are currently controlled by ExxonMobil and Tullow Oil, Clive Thomas, director of Guyana’s State Assets Recovery Agency, told Bloomberg in an interview published this week.
Neither Exxon nor Tullow Oil are targets of the investigation. The two companies are not accused of any misconduct either. They are operators of the oil blocks which will be included in the scope of the investigation as the current administration in Guyana is looking to assess the procedures under which the oil blocks had been awarded.
The Stabroek, Kaieteur, Canje, and Orinduik blocks will be part of the investigation. Exxon is operator of Stabroek, Kaieteur, Canje, while Tullow Oil operates the Orinduik block.
“We’re building up a case. This is an area of investigation into how the blocks were allocated and the decisions that were made,” Thomas told Bloomberg.
The little known South American country bordering Venezuela has become one of the world’s top hotspots for oil offshore operators in just a few years. Some critics of the way Guyana handled the oil block leases, such as the president’s former energy adviser Jan Mangal, argue that Guyana sold off its oil riches too cheaply. A curious fact was also the timing of a lease for the Kaieteur block to Exxon in the final days of the previous administration in 2015—the awarding of the block took place just nine days before Exxon announced its first (of now more than a dozen) discoveries offshore Guyana.
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Exxon was the world’s top oil and gas explorer in 2018, thanks to its significant investment in Guyana, according to Rystad Energy’s annual exploration review.
Guyana is one of Exxon’s key growth areas for the coming years, alongside the Permian.
Earlier this month, Exxon gave the green light to the development of Liza Phase 2 offshore Guyana after it received government and regulatory approvals. Phase 2 is expected to begin producing up to 220,000 bpd in mid-2022, while Phase 1 is on schedule for first oil by first quarter of 2020, with up to 120,000 bpd of production.
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.