An Exxon Mobil-led oil consortium will need to decide by October whether it will go ahead and develop a large natural gas find off the coast of Guyana, the country's vice president said on Thursday.
The government has been pressing for a bonanza from mostly untapped gas reserves found by the Exxon-led group. The consortium, which includes Hess Corp and CNOOC Ltd, is required under its production agreement to return to the government by October about 20% of its massive Stabroek block if that area remains undeveloped.
Exxon has said it hopes to complete an appraisal of the gas findings by early next year and is considering how to best commercialize the natural gas. The October deadline for relinquishing untapped areas calls for it to make a decision sooner.
That 20% of the undeveloped Stabroek area might include the group's Haimara discovery, where it mostly found natural gas, Guyana Vice President Bharrat Jagdeo said on Thursday during a media briefing in Georgetown.
"We have had some discussions with Exxon and told them that if they are not going to work on it, they have to relinquish. They did some studies and said they might be able to move forward with the project," Jagdeo said.
An Exxon spokesperson said it is in discussions with Guyana over what areas will be relinquished. The consortium’s exploration agreement runs through 2027, the spokesperson added.
Haimara, the group's 12th finding of oil and gas in the country, was announced in 2019. Exxon has said the Haimara-1 well found approximately 207 feet (63 meters) of a high-quality, gas-condensate bearing sandstone reservoir.
There could be up to 16 trillion cubic feet of associated gas in Exxon's areas, Jagdeo said, citing Exxon accounts.
Guyana is moving ahead to select a company that could develop the gas project, which it estimates will require between $10 billion and $15 billion in investment.
"We tested the market. We went out for expressions of interest and had some really good, strong firms with good credentials saying, 'We believe there is a viable project and we want to work on it,'" he added, without identifying the firms.
The cabinet must approve the company selected and once approved, that firm would be cleared to initiate talks with Exxon over a project to monetize the gas reserves.
(Reuters - Reporting by Marianna Parraga; Editing by Cynthia Osterman)