New oil law, model contracts to be finalised in August as oil blocks auction extended for final time

The newly-developed Petroleum Activities Bill and model Production Sharing Agreements (PSAs) will be finalised in August, ahead of the final extension given for the offshore oil blocks auction.

This is according to Vice President Dr. Bharrat Jagdeo who engaged reporters at a press conference held on Thursday at Freedom House, the People’s Progressive Party Civic (PPP/C) Headquarters in Georgetown.

Another extension in the bidding for offshore oil blocks was announced this week; this time, the new submission deadline is September 12, 2023. The Ministry of Natural Resources, via a press release, said this extension was implemented to allow the government to finalise new changes to the sector’s regulatory framework.

The auction was launched in December 2022 with an April 2023 deadline. It was later extended to June, then July.

Jagdeo said the recent extension to September is the final one.

“… we anticipate the legislation will be passed before the (Parliamentary) recess so we will have a finalised PSA and new Petroleum Bill… the two preconditions that we set for ourselves,” the Vice President said.

The Parliamentary recess starts in August. And Jagdeo said the new Bill should be tabled at the next sitting of the National Assembly, that is, on August 3.

Meanwhile, the Vice President believes that potential investors have not lost interest in Guyana’s oil blocks auction despite the delays. In fact, he said interest seems to be growing still.

The oil blocks on auction are for shallow and deep water areas.

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.