Kaieteur News – The Government of Guyana has clearly stated that the proposed exit by ExxonMobil and Hess Corporation from the Kaieteur Block must be consistent with the country’s legal framework.
ExxonMobil, which operates the Kaieteur Block with a 35% stake, and Hess, holding a 20% stake, have recently expressed to the government, their intent to divest their interests in this offshore oil asset.
The move would leave Ratio Guyana Limited and Cataleya Energy Limited as the principal stakeholders. But the Government of Guyana has emphasized the importance of due diligence and adherence to the law.
The Ministry of Natural Resources, in a statement on Thursday, underlined that while it acknowledges the decisions by the oil giants, any process concerning a transition in the ownership of the Kaieteur Block must be in alignment with the recently enacted Petroleum Activities Act 2023.
This legislation, along with its regulations and the Kaieteur Petroleum Agreement and its associated prospecting license, sets the parameters for such transitions. The recent Petroleum Activities Act has modernised Guyana’s oil and gas regulatory framework. This is the second such transfer of interests under the new framework, after Tullow’s exit from the Orinduik Block.
The Ministry noted that once a formal application for the exit is received, it will be critically evaluated in accordance with the relevant legislation and regulatory tools. Notably, Ratio and Cataleya had held the Kaieteur Block before stakes were farmed out to Exxon and Hess.
Before the announcements of the planned exits by Exxon and Hess, suspicion was raised when ExxonMobil submitted a cumulative impact assessment (CIA) to the Environmental Protection Agency (EPA), covering only the Canje Block, despite initially seeking approval for drilling in both the Canje and Kaieteur Blocks. This omission was the first hint of ExxonMobil’s possible reduced interest in the Kaieteur Block.
While Hess has yet to release its own statement, it is anticipated that more details will emerge during its 2023 third quarter earnings call. In the meantime, Ratio Energy, a partner in the Kaieteur Block, has taken proactive steps by notifying the market of the exit intentions of both ExxonMobil and Hess. Anticipated to take up operatorship of the Block, Ratio is now laser-focused on bringing in new qualified, well-capitalised companies to help explore and develop the offshore asset.
For potential stakeholders eyeing the Kaieteur Block, the message from the Government of Guyana is clear: the sanctity of its laws and regulations remains paramount. The coming weeks are likely to see a flurry of activity as Ratio and Cataleya streamline their prized list of oil companies courting them for a stake in the Kaieteur Block.
Meanwhile, ExxonMobil and Hess are poised to take up stakes in at least one more block offshore Guyana, as the Stabroek Block consortium, inclusive of CNOOC, have thrown their collective hat in the ring of Guyana’s offshore licensing round.
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