Guyana Launches Offshore Oil & Gas Licensing Round, Eyes New Exploration

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The Guyanese government announced a licensing round earlier this month, in which 14 offshore blocks would be auctioned next year for oil and gas exploration, as the country seeks more international investments.

Guyana aims to attract major international companies as it prepares to rapidly scale up oil and gas exploration and production only three years after pumping its first oil.

The new licensing round will close in April 2023, and the contracts are expected to be awarded by the end of May. As part of the new licensing round, the Guyanese government is creating new production-sharing agreements. The details of the new production-sharing models remain unclear, but Guyana's ministry said more information is forthcoming.

No details have emerged regarding which companies may be interested in the licensing round, although Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) previous success in Guyana might attract some more investments.

According to the government, an estimated potential of more than 25 billion barrels of oil equivalent exists offshore Guyana, with another 11 billion in estimated reserve. Meanwhile, the Stabroek block, operated by a consortium led by ExxonMobil, has recoverable resources of 11 billion barrels of oil.

Developments in the Stabroek block put Guyana on the energy map as the newest oil nation. Since ExxonMobil produced the first oil and began exporting crude shipments, the company and Guyana have worked to expand production and install new capacity.

Currently, Guyana produces between 300,000 barrels of oil per day (BBL/d) and 400,000 BBL/d from ExxonMobil's Liza project. Exxon plans to increase production to 1.2 million BBL/d by 2027.

Despite the success story of the Stabroek block, other companies have faced exploration failures in Guyana. Tullow Oil plc (London, England), for example, faced two setbacks offshore Guyana with the exploration of two fields.

In 2020, Tullow drilled the Carapa-1 well, which yielded oil but was not commercially viable. In August this year, Tullow drilled two exploratory wells at the Beebei-Potaro field, but both hit water-bearing reservoirs.

These setbacks could impact others' decisions regarding Guyana's latest licensing round. Industrial Info is tracking 28 offshore oil and gas projects in Guyana, worth US$6.3 billion.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a list of project reports.

Guyana also is looking to develop downstream assets, such as its first refinery to process the crude it produces. Currently, the country imports fuel for domestic consumption; the 30,000-BBL/d refinery could change that situation. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refinery project and plant databases can click here for the project report and click here for the related plant profile.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).