Guyana should have a seat at the table in all future oil contracts -Former Suriname Oil Boss

Jan 11, 2022 News

By Kiana Wilburg
Kaieteur News – The Guyana Government has indicated that it intends to pursue the country’s first oil blocks auction in the third quarter of 2022. When it does this however, there are regional and international stakeholders who strongly recommend that it would be in the country’s interest for the administration to secure the right to participate in the contract governing the oil block being sold.

Former Staatsolie Boss, Rudolf Elias

Specifically, former Head of Staatsolie, Suriname’s National Oil Company (NOC), Rudolf Elias says the right to participation would allow Guyana a seat at the table to examine all costs associated with the offshore concession thereby making the auditing process less problematic.
As he provided advice on how Guyana can make the best of its first oil blocks auction, Elias said, “I would say to Guyana’s authorities to have this process well advertised and very transparent and open. Everybody who bets should be able to see who else is bidding in the process…transparency brings the best results. And I would say also to be sure that Guyana has, you know, a good part of the pie. I’m not talking about money and I’m not talking about the oil. I’m talking about participation right, because participation gives you so much more knowledge than just normal education about the sector.”
Elias, who has 30 years experience in the industry, also advised Guyana to have an independent seismic survey conducted before the auction. Though this can be costly, he noted that this allows the country to better understand the prospectivity of its block, thereby increasing the bets made by the international companies. Essentially, countries would know what their assets are worth and avoid being lowballed.
Vice President and local oil czar, Dr. Bharrat Jagdeo had disclosed that the auction will require that the government aggressively enforces the relinquishment provisions in the contracts it has with companies such as ExxonMobil, Tullow, and Repsol.
To go to an auction however, Jagdeo said the government would have to make several policy decisions.
He said, “We will have to get someone who has done this before. We have to get technical help. Secondly, we have to also make a decision like some countries are doing, whether we want to invest, like Suriname is doing, to shoot 3D seismic and then auction the block with seismic data which gives us a higher price.”
Another key consideration, he said, is whether government should preclude existing companies such as ExxonMobil to be part of the bidding round. It should be noted that ExxonMobil is the only company which has a hold on the largest acreage in the Guyana basin. If it acquires more, it would only serve to increase its monopoly.
“So we have to make that policy decision…,” the Vice President noted, while adding that if there is need to amend laws in the future to allow for this auction to take place, then it would certainly occur.

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News