Guyana expects to hire consultants to help market its offshore oil basins in the wake of the huge finds by US giant Exxon Mobil and partners, the South American country's energy minister told Reuters. Since 1999, Guyana has awarded an Exxon-led group hundreds of blocks that stretch across Guyana's maritime borders with Venezuela and Suriname. Their finds are turning Guyana, a country with no history of oil production and relaxed energy regulation, into one of Latin America's hottest prospects for oil investments.
Exxon, China's CNOOC and US-based Hess Corp operating in a consortium discovered more than 3 billion barrels of oil and gas resources off Guyana's Atlantic coast, enough to boost the nation's oil output to more than 500,000 barrels per day (bpd) in coming years, a similar volume to Opec-member Ecuador. One of South America's poorest nations, Guyana plans to recruit a firm to suggest ways of valuing and negotiating its remaining offshore areas, Guyana's minister of natural resources, Raphael Trotman, told Reuters in an interview in the nation's capital.
"The cabinet has made a decision that any future allocations will be made based on advice from a firm of international repute that has advised governments on this kind of thing before and that is how we intend to proceed," Trotman said. Guyana's government has a list of qualified candidates for the advisory position, which he did not identify. No oil auctions are yet planned, Trotman said. The country is receiving interest from major oil firms, including France's Total, Spain's Repsol, US-based Chevron Corp and Italy's ENI Trotman said.
The same majors, independents and national oil companies also are active in auctions in Brazil and Mexico, and studying other opportunities in Latin America, which is rushing this year to install energy reforms to attract more foreign investment. Among the blocks that Guyana could make available is a deepwater area near the Exxon group's Stabroek, located 150 miles (241 km) off Guyana's coast, as well as several shallow-water blocks.
The Exxon consortium, which paid $18 million as a signing bonus for its Guyana blocks, expects production from its flagship Liza-1 well to reach 120,000 bpd by 2020. The group has made seven discoveries off the coast of Guyana, the most recent in February from the Pacora-1 exploration well at the 6.6-million-acre Stabroek block.
In 2016 the companies signed a new agreement with Guyana for a four-year license to develop its blocks. The deal included two possible three-year extensions. The parties also agreed to a 2 percent royalty and 50-50 profits when production costs are recovered. Under Guyana's petroleum act, a licensee may apply for no more than 60 blocks but the minister has the power to grant more than that, which is what Trotman said he did with the Exxon consortium.