Government is not disappointed that only six companies bid for eight of the fourteen available oil blocks since those participating were global oil majors, in addition to the fact that there is still room for government-to- government negotiations for the many countries that had expressed interest, President Irfaan Ali says.
And given the current global investment climate for petroleum projects where other countries have not had the feedback they desired, Guyana was grateful for the bids placed and will try to maximise the potential opportunities to develop its resources, the President reasoned.
“First of all, it is not a disappointment at all. This market, let us be very open and factual about this, we went out to auction at a time when major economies in the world are basically saying to oil producers, we are not going to finance you. You are going to a market where capital is an issue. Many countries went to this same market and got no response for their auction,” the President said as he fielded questions at a forum organised by the Washington DC-based Inter-American Dialogue (IAD) where he discussed his administration’s views on opportunities and challenges in US-Guyana relations.
According to the IAD, it engages “our network of global leaders to foster democratic governance, prosperity, and social equity in Latin America and the Caribbean. Together, we work to shape policy debate, devise solutions, and enhance cooperation within the Western Hemisphere.”
The Stabroek News yesterday reported that after several postponements and much hype, only six companies bid for 14 potentially oil-rich, offshore blocks and ExxonMobil is among them.
Various senior government officials had talked up the prospects of the offshore blocks but when the deadline passed yesterday only six bids, including from French oil company Total were entered. Notice-ably absent were any bids from India or Indian companies. The number of bids and their origins would be seen to be below the government’s expectations.
The receipt of the bids also saw Middle East oil and gas power house, Qatar, submitting a bid, a move that coincided with a one-day visit to Guyana by its Emir.
Observers had said that given the adjusted terms of the PSA (Production Sharing Agreement) which were far more beneficial to Guyana than the one ExxonMobil sealed in 2016, there would not likely be many bidders. This was particularly so given the increasing shift away from carbon fuels and the projections that in a decade or so, demand would fall substantially. Bidders would have faced around a 15-year timeline between exploration and possible production with no guarantee that light crude would be found.
After giving a more than half an hour insight into opportunities in Guyana and his government’s future plans, Ali was yesterday asked by a member of the audience about his views on the low bids submission, that no Indian companies had bid, and to what extent it was a disappointment.
“We went to this market for fourteen blocks and we got response for eight blocks. We are very happy. That is significant and cannot be minimised in any way, shape, or form, because many countries went out and got no attraction,” he said.
“If you follow what we are doing, you would know that many countries have expressed a preference for government-to-government exploration and relationship on this issue. India would have expressed a willingness to work government-to-government, Qatar would have express-ed an interest in working government-to-government, and the DR [Dominican Republic] has also expressed that interest. So that option is also there. But what we said is, we must put all the blocks out there and have a public process. An open transparent, public process and that is what we are proud of”, he said.
The President said that Guyana has been able, as a newcomer in the petroleum producing business, “to demonstrate transparency and openness in putting out the blocks for public auction.”
And in doing so, Ali said that the process saw global oil major bidding. “What we have seen is a number of major companies. What you have seen is the consortiums, is a number of companies that have the wherewithal to be part of the auction. You ask how disappointed I am, I am not disappointed. I think this is a tremendous accomplishment given circumstances and the market we are operating in”, he added.
Pointing to the Inter-American Development Bank loan for the GYSBI shorebase that had been vetoed by the Joe Biden administration, Ali said that Guyana has much to be grateful for.
“We have the experience of having one loan vetoed already because it was being associated with the oil sector,” he emphasised.
And against the background of developing countries’ anti-fossil stance, Ali said that Guy-ana will make its position known on the issue at the upcoming COP 28 meeting. In a world that sees projections of fossils being part of the energy mix more than 50 years from now and with over 50% of the world’s current energy coming from petroleum, Ali said that “questions will be asked at COP28.”
