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Guyana, one of the world’s hottest frontier oil plays, is expected to have its new oil production sharing agreement (PSA) model ready in time for its auction that runs through mid-April, according to Guyana’s VP.
The oil and gas industry has been eagerly waiting for Guyana to draft new contract terms that have been a long time in coming after Guyana made it clear that oil companies wouldn’t be getting what it considered to be a sweetheart deal like the Exxon consortium did.
Guyana expects the new contract model to be available to share with prospective bidders sometime late next month or early in Q2.
The April auction will see 14 of Guyana’s oil and gas exploration blocks put on offer, and could double Guyana’s offshore area currently being explored.
Guyana’s VP told energy conference attendees on Tuesday that Guyana could also allocate additional blocks to Brazil, Qatar, and India through bilateral agreements, and Guyana has already been in talks with the UAE and the UK.
The Exxon-led consortium that includes Hess and CNOOC told Reuters that it wasn’t planning on adding to its territory in Guyana until it is given the opportunity to review the terms.
While the auction closes on April 14, the blocks will be awarded to successful bidders sometime later in the second quarter. While companies can bid on as many blocks as they’d like, a maximum of three blocks will be awarded to any one company.
Guyana is thought to contain as much as 25 billion barrels of oil resources—part of which have already helped the country increase its gross domestic product by more than 50% last year from the year prior.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.