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Guyana holds off on new licensing pending seismic

  • Market: Crude oil, Natural gas
  • 22/11/19

Emerging oil producer Guyana is completing a series of offshore seismic surveys before negotiating new production-sharing contracts, the government's energy department director Mark Bynoe said.

The surveys will help with the negotiation of PSCs for remaining identified blocks and for unallocated acreage offshore, when Guyana resumes offshore licensing, Bynoe told delegates at an oil conference this week.

Guyana paused new licensing last year and will not resume until early 2021, when it completes a review of contract terms, Bynoe has previously said.

Guyana has concluded PSCs with several companies, including ExxonMobil that will deliver light sweet crude from the deepwater Stabroek block starting in December.

The PSCs with ExxonMobil and other companies including France's Total, UK-listed Tullow, Italy's Eni and Spain's Repsol are based on a model designed in 1986 before the significant potential of the country of 780,000 people was discovered in 2015.

Tullow recently announced that it is assessing heavy sour crude found on its Orinduik block off Guyana.

Guyana is making changes to its hydrocarbons legislation as the country approaches a critical 2 March 2020 parliamentary election in which the benefits of the coming oil boom are a major campaign theme.

The ruling People's National Congress (PNC) party that has overseen the advent of oil development faces a close challenge from the main opposition People's Progressive Party (PPP), which has pledged to toughen oil contract terms.

Both parties claim to be centrist and pro-business, but if it is elected, the PPP would "revisit the lopsided oil contracts, except that with ExxonMobil and its partners," the party's general secretary and former president Bharrat Jagdeo said 14 November.

Given Guyana's status as a frontier country with no proven reserves at the time the contract was signed in 1999, ExxonMobil could legitimately argue in favor of the terms in its PSC, Jagdeo said.

"Guyana could still claw back value from the contract with ExxonMobil," he said. But while ExxonMobil "can claim frontier advantages, we have made it clear we will review all the others in order to obtain more revenue for the country."

ExxonMobil recently announced a 14th discovery at Stabroek, boosting the total estimated recoverable reserves to more than 6bn bl of oil equivalent (boe).

The US major plans to start producing 120,000 b/d, ramping up to 750,000 b/d by 2025, a level rivaling that of neighboring Venezuela and outpacing Ecuador.

ExxonMobil's Stabroek partners are US independent Hess and Chinese state-owned CNOOC unit Nexen.

"We need to enhance the legislative framework for issuing licenses so we will not be going to market until that framework is more robust," Bynoe said on 6 November.

He said the contract terms must be revised "because there are elements of the basin that have now been de-risked."

The 2D and 3D seismic surveys will help Guyana to "understand the prospectivity that is there, so it will allow us to then issue blocks in a specific quadrant," Bynoe said.

By Canute James


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06/11/24

Cop 29 finance talks need leadership after Trump win

Cop 29 finance talks need leadership after Trump win

Edinburgh, 6 November (Argus) — Donald Trump's US presidential election victory will likely affect finance negotiations during the UN Cop 29 climate summit starting next week, but the US can still play a role while other developed countries step up to the plate, according to observers. Key negotiations at Cop on a new finance goal for developing nations, the so-called NCQG, could be "severely undermined" by Trump's victory, as the prospect of Washington withdrawing from the Paris Agreement may discourage other countries from engaging with US officials, non-profit IISD's policy adviser Natalie Jones told Argus . Trump pulled the US out of the Paris Agreement during his last term in office, calling it "horrendously unfair", and he has signalled he will do so again. "This could potentially weaken ambitions" at Cop 29, but it is unlikely to derail negotiations, Jones said. Observers agree that the US can still play a role in talks on the new finance goal, a key topic at this year's summit. Parties to the Paris deal will seek to agree on a new finance goal for developing nations, following on from the current $100bn/yr target, which is broadly recognised as inadequate. "The Biden administration still has a critical window to support vulnerable nations' calls to mobilise climate finance and deliver a strong climate target," civil society organisation Oil Change International's US campaign manager Collin Rees told Argus . The Biden administration's delegation, which will still take part in Cop 29, will not change position at this stage, according to Jones. And the US could continue to show some leadership, she said, adding that Washington likely intends to release its 2035 Nationally Determined Contribution (NDC) early. Countries' new climate plans must be submitted to the UN climate body the UNFCCC by February 2025, but the US could release its NDC at Cop 29 before Trump takes power early next year, she said. "President Biden must do everything he can in the final weeks of his term to protect our climate and communities," including on fossil fuels, Rees said. The prospect of Trump pulling the US out of the Paris accord could cause initial anxiety at Cop 29, Climate Action Network executive director Tasneem Essop said. But "the world's majority recognises that climate action does not hinge on who is in power in the US". "As we saw before and will see again, other countries will step up if the US reneges on their responsibilities and stands back," Essop said. Trump's victory might also present the EU with an opportunity to strengthen its leadership among other developed countries, according to Jones. "It is really on the EU and other countries to step up now," she said. This is a view echoed by German Green lawmaker Michael Bloss, a member of the European Parliament's delegation at Cop 29. "Europe needs to become the adult in the room," Bloss told Argus . The EU cannot rely on the US anymore and must become a global climate leader to ensure success at Cop 29, he said. Meanwhile, Oil Change's Rees stressed that the NCQG is a collective goal. "Other major economies must now step forward to fill the gaps, much as they would have needed to in any scenario given how the US has long refused to pay its fair share," he said. By Caroline Varin and Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Europe gas market shows muted reaction to US Trump win


06/11/24
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06/11/24

Europe gas market shows muted reaction to US Trump win

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Iraq proposes doubling payment for KRG crude


06/11/24
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06/11/24

Iraq proposes doubling payment for KRG crude

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Q&A: French state auction for biomethane RGGOs


06/11/24
News
06/11/24

Q&A: French state auction for biomethane RGGOs

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Trump nears victory in US election: Update 3


06/11/24
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06/11/24

Trump nears victory in US election: Update 3

Updates throughout with latest election results, market reaction Washington, 6 November (Argus) — Former president Donald Trump appears to be closing in on victory in the US election, after winning several key swing states. Trump, the Republican nominee, was declared the victor in Georgia and North Carolina shortly after midnight ET on election night, according to the Associated Press. Trump has also won the key state of Pennsylvania, several US networks said. Trump was leading vice president Kamala Harris in all four other key swing states — Wisconsin and Arizona, Michigan and Nevada — based on partial results as of 02:00 ET (07:00 GMT) on 6 November. The seven swing states will decide which candidate reaches the threshold of 270 electoral votes needed to win the election. Trump had secured 248 electoral votes as 02:00 ET, with Harris at 214. Victory in Pennsylvania, if confirmed, would give Trump 267 votes and all-but end Harris' chances of victory. The prospect of Trump's re-election sent Brent crude futures down by as much as 2.5pc to a low of $73.64/bl, largely reflecting gains in the US dollar. A strong dollar tends to weigh on prices of commodities by making purchases more expensive for buyers using other currencies. Trump has promised to pursue a radical shift for the US on policies related to energy, taxes, trade and foreign affairs — reversing many of the policies and legislation that Democrats have put in place under President Joe Biden. On energy policy, Trump said he wants oil and gas producers to "drill, baby, drill" to bring down domestic energy prices and to dismantle many of the regulations and climate policies put in place by Biden, which Trump dubbed the "Green New Scam". Trump said he would immediately lift a "pause" on licensing new LNG export terminals and restart oil development in Alaska's Arctic National Wildlife Refuge. Trump wants to impose a 20pc tariff on all foreign imports and even higher tariffs on China. The next president faces decisions on the future of US support for Ukraine and related restrictions on Russian energy exports, enforcing US sanctions against Iran and Venezuela and how to contain the growing threat of an Israel-Iran war and its potential impacts on oil flows from the Middle East. Republicans also took control of the US Senate for the first time in four years. In the US House of Representatives, too many races are undecided for major networks to project control. In 2025, the US Congress is poised for a major fight on tax policy because of the year-end expiration of an estimated $4 trillion in tax cuts. By Chris Knight, Haik Gugarats and Kevin Foster Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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