Guyana to complete new oil contract model by Q2 as auction looms

Guyana expects to finalize a new oil production-sharing agreement model on time for an auction that will collect bids through mid-April, the country's vice president told an energy conference on Tuesday.

Guyana expects to finalize a new oil production-sharing agreement model on time for an auction that will collect bids through mid-April, the country's vice president told an energy conference on Tuesday. The South American country has emerged as one of the hottest offshore areas in decades with as much as 25 billion barrels of oil and gas. The country for months has promised to deliver new contract terms, but has been repeatedly delayed.

Oil ministers and executives are in Guyana this week to learn more about 14 oil and gas exploration blocks on offer. Vice President Bharrat Jagdeo told attendees a new contract model would be available in late March or early in the second quarter. "We want multiple numbers of investment groups coming in here because then you can start the exploration activities simultaneously," Jagdeo said.

The country is also considering allocating extra blocks to countries including Brazil, Qatar and India through bilateral agreements, he said. Guyana has been in talks with the United Arab Emirates and the United Kingdom, President Irfaan Ali said last month in India. Liam Mallon, president of Exxon Mobil's oil and gas production business, earlier told Reuters an Exxon-led consortium was not ready to consider adding to its sizeable exploration territory in Guyana until terms are disclosed.

INCREASED OUTPUT The Exxon group including Hess Corp and CNOOC Ltd has the capacity to increase output in Guyana to as much as 400,000 barrels of oil and gas per day (boepd) by optimizing operations at its two production vessels, Mallon said.

Their two vessels, Liza Destiny and Liza Unity, currently produce 380,000 boepd, above the 340,000 originally planned. Exxon is working to more than triple Guyana production to 1.2 million barrels per day by 2027 and may go beyond that, Mallon said. A third vessel, Prosperity, is expected to depart Singapore shortly. The consortium plans six floating production storage and offloading vessels with combined capacity to produce over 1.2 million boepd by the end of 2027.

"We have to put our resources where we think the biggest opportunities are," Mallon said. INDIA, QATAR ARRIVE

Guyana is using this week's conference to highlight next quarter's auction which could potentially double its offshore area under exploration. Oil industry contingents from India, the United Arab Emirates, Qatar and the United States were on hand to hear Jagdeo and Ali discuss their goals for the lease sale. Like Exxon, many executives are hoping to learn precise terms before deciding whether to invest billions of dollars.

"At the end of the day, you are investing in deepwater developments, you are investing a lot of money upfront," Mallon said of the risks involved. But he added: "We are still relatively early in the exploration phase."

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)