Venezuela mounts protest against Guyana’s oil auction

Sep 20, 2023 ExxonMobil, News, Oil & Gas

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– Pres. Ali says country entitled to pursue economic development in maritime borders

Kaieteur News – The Venezuelan Government has mounted a protest against Guyana’s recently concluded oil blocks auction. In a statement issued yesterday, the by its Ministry of Foreign Affairs, the administration said, “The Bolivarian Republic of Venezuela strongly rejects the illegal bidding round for oil blocks currently being carried out by the Government of the Cooperative Republic of Guyana since it intends to have maritime areas pending delimitation between both countries.”

It further noted that the Government of Guyana does not have sovereign rights over these maritime areas and consequently any action within their limits is a violation of international law, as long as they are not carried out through an agreement with Venezuela. The missive added, “The Bolivarian Republic of Venezuela reiterates that any illicit and arbitrary concession that Guyana grants, has granted or intends to grant in the areas in question is unacceptable and violates its sovereign rights, and warns that these actions do not generate any type of rights for third parties to participate in this process.”

Guyana’s Head of State, Dr. Irfaan Ali categorically stated however that his administration is entitled to pursue economic development within the nation’s maritime borders. The President said, “The Government of Guyana reserves the right to pursue economic development activities in any portion of its sovereign or any appurtenant maritime territories. Any unilateral attempt by Venezuela to restrict the exercise by Guyana of its sovereignty and sovereign rights will be wholly in consistent with the Geneva Agreement and the rule of international law.”

Guyana and Venezuela are currently before the International Court of Justice (ICJ) to address the latter’s spurious claims over the former’s sovereign territory. Such aspersions were raised by Venezuela after an ExxonMobil-led consortium marked its first discovery in the Stabroek Block, following which it blazed a trail of over 33 significant discoveries. The exploration success has not only catapulted Guyana to international stardom in the oil and gas arena but was responsible for generating significant interest in the country’s first oil blocks auction that featured 11 shallow water blocks and three deepwater concessions.

Vice President, Bharrat Jagdeo and chief policymaker for Guyana’s oil sector said last week that eight of the 14 blocks received bids from six groups of companies. The companies that submitted bids include: Total Energies EP Guyana B.V, Qatar Energy International E&P LLC, & Petronas E&P Overseas Ventures SDN BHD (Malaysia); Delcorp Inc – Guyana, Watad Energy, Arabian Drillers (Saudia Arabia); Exxon Mobil Guyana Limited, HESS New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited; Liberty Petroleum Corporation (USA) and , Cybele Energy Limited (Ghana); Sispro Inc. (Guyana); and lastly International Group Investment Inc. (Guyana), in joint venture with Montego Energy  SA (London).

The Vice President did not state which companies made bids for certain blocks. Be that as it may, the official said, “We are very pleased with the offers that we had from the bid round (which closed September 12, 2023). The blocks that we did not receive bids for are D3, S1, S2, S6, S9, and S11. So that means some of the blocks are very competitive. A number of people are questioning whether this was a successful bid round or not but we are pleased with how the round has gone.”

He said the government is satisfied with the outcome, especially since the auction was held after the modernization of the legislative and regulatory framework. The chief policy maker for Guyana’s oil sector was pleased with the fact that authorities kept its promise to not conclude the bid round without new model Production Sharing Agreements (PSAs) in place to govern deepwater and shallow water blocks. He also lauded the passage of the Petroleum Activities Law.

Along with having a more robust regime in place, Jagdeo said one needs to appreciate the global context within which the new system was implemented. He noted in this regard that there is a push for oil companies and the world over to reduce their reliance on fossil fuels. As a result, oil companies he said are finding it more challenging to raise financing for petroleum related activities.

With those factors considered, Jagdeo said the interest for eight of the 14 blocks on offer was commendable. He said the next stage is for authorities to review the bids received, following which, more details would be released. Jagdeo also anticipates that awards will be made before the year’s end.

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• Auction, Blocks, Bolivarian Republic of Venezuela, Government of the Cooperative Republic of Guyana, Venezuelan Government

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