Guyana is considering forming a national company to manage its oil resources, and also plans to offer new licences, with the final decision on the process expected by September, reported Bloomberg News.
The oil-rich South American country is also planning to restrict the US energy giant Exxon Mobil’s influence in the country’s oil industry by excluding it from bidding for new exploration areas, the report added.
Guyana vice-president Bharrat Jagdeo was cited by the publication as saying, at the BNEF Summit, in New York, that the country received interest from oil companies following a series of discoveries made in the country by Exxon.
Jagdeo said: “There’s been a public issue about concentration.”
He noted that one option under consideration is transferring the exploration licences to a state-owned oil company.
This company would be operated by a strategic partner that could potentially be from the Middle East.
The move would help the government in playing a “very passive role” in the development of the country’s oil industry.
Exxon’s partners, including Hess and China’s CNOOC, could also be barred from the potential auction as they already own most of the country’s oil resources.
Jagdeo added: “We are yet to determine whether we’d allow those existing operators, particularly those in that block, the Stabroek block, to bid if we go the auction route.”
Either way, Exxon’s current operations are expected to be unaffected. The firm plans to produce approximately 800,000 barrels of oil by 2025.
Jagdeo said that the new licences as considered ‘important’, as they would help correct the “inequity” of the original production sharing contract of Exxon.
“There’s been a lot of call for renegotiation of the contract. We have opted not to do so. We can correct this inequity, this imbalance, in future blocks,” Jagdeo added.
ExxonMobil recently received approval from the Guyanese Environmental Protection Agency (EPA) for the development of the Yellowtail offshore oil project.