Oil blocks’ auction on for end of September

The much-anticipated sale of Guyana’s oil blocks is set for the end of September, Vice President Dr. Bharrat Jagdeo said on Tuesday night.

These blocks will be sold through an auction process, essentially meaning that the highest bidder will gain control of a specific area to search for and possibly produce oil and gas.

The Vice President, speaking during an online programme, was keen on noting that this mechanism of marketing Guyana’s oil resources has never been done before.

“That is major,” he said.

He, however, noted that the government has to institute key provisions to facilitate the auction since Guyana’s laws do not allow for this.

The blocks that will be up for auction include those areas that have been relinquished by oil companies searching for oil offshore.

The Vice President’s statements on Tuesday come just weeks after he announced that the government is exploring whether it will permit local participation in the auction- even without the requisite knowledge of developing those blocks.

At a recent press conference, Dr. Jagdeo said that he would support a consortium of Guyanese bidding for the blocks.

Because Guyanese may not have the knowledge of or capital to develop those blocks (that is, search for oil and if successful, produce oil), those who may gain ownership of the blocks may engage in “flipping” the blocks. The government, Jagdeo had said, has to consider whether it will allow this.

Meanwhile, during his first official visit to Washington, D.C., President Dr. Irfaan Ali noted that Guyana is hoping to attract new explorers. He also hopes that companies will partner with Guyanese to develop the oil blocks.

Already, prolific exploration in a 6.6 million-acres block called Stabroek by ExxonMobil affiliate Esso Exploration and Production Guyana Limited (EEPGL), has led to multiple discoveries that could result in production of 11 billion barrels of oil.

Production has commenced at two oil fields: Liza Phase 1 and Liza Phase 2.