GEORGETOWN, Guyana (CMC) – Guyana on Friday launched the first auction for the development of new oil blocks under competitive terms with the government, maintaining that it is looking towards the “expeditious” development of oil and gas resources.

President Dr Irfaan Ali said 14 offshore oil blocks are up for auction and that the government is hoping to award new contracts by the end of May next year. Submissions of bids will close on April 14, 2023.

“This, of course, will follow negotiations and evaluation of the bids that we receive during this bidding round,” Ali said in a Facebook Live post, adding that the bidders would have to pay a US$20,000 participation fee that would also allow access to a virtual data room.

Ali said Guyana’s offshore basin has captivated the attention of the global oil market participants, being called the world’s fastest-growing super basin, with estimated resources in excess of 25 billion barrels of oil equivalent (boe) and an estimated reserve in excess of 11 billion boe.

He said the licensing round allows the Government of Guyana to create and administer an improved fiscal and regulatory framework that is driven by good international oil field practices and standards.

“What we are seeking to do is to have the best possible outcome for Guyana, given the lessons we have learnt,” Ali said.

So far, a consortium of companies – Exxon, Hess and CNOOC – are the developers of a giant block called Stabroek offshore Guyana.

There has been much criticism of the terms of the Stabroek contract, but the government has said it honours the sanctity of contracts and will not renegotiate but that any other contract will see improved terms.

The oil blocks on auction are for shallow and deepwater areas with the authorities saying there will be separate requirements for qualification to participate in deepwater versus shallow water blocks for tender with a higher bar set for deepwater areas, which reflects the capital-intensive nature of deepwater exploration and production (E&P) and the highly specialised technical competence required for deepwater E&P activities

There will be a minimum signature bonus requirement of US$10 million for shallow water and US$20 million for deepwater blocks.

President Ali said Guyana is interested in “serious” developers and at the same time aiming for a “balance” to ensure that the country gets the best possible deal in terms of revenue while at the same time not scaring off investors, recognising that “the cost for capital is going up and we also understand the access to capital has become cumbersome.”