Shell, Chevron And Petrobras Weigh Guyana Oil Auction Bids

• Guyana's upcoming auction of offshore oil exploration blocks has lured at least 10 companies including Shell, Petrobras and Chevron, to consider the decade's hottest oil region.
• The South American country is offering 14 offshore blocks in an attempt to speed up economic development and reduce an Exxon Mobil-led consortium's dominance of its oil sector. Winning bidders are expected to be picked next month.
• Companies interested in the April round have paid for seismic data to evaluate the blocks to decide whether to submit offers. They include six big international producers, Energy Minister Vickram Bharrat has said, without identifying the companies.
• Guyana estimates it has up to 25 billion barrels of oil and gas in place off its coast. A consortium that includes Exxon Mobil, Hess Corp, and CNOOC Ltd, operates the country's most important area, the 6.6-million-acre (26,800 sq km) Stabroek block, with more than 30 discoveries to date.
• Notably, Guyana plans to issue a new Production Sharing Agreement (PSA) model for leasing offshore blocks by the end of this month.
• The proposed rules will nearly double the government's take from oil production to 27.5% of royalties and profit oil, plus a new 10% corporate tax, compared to Exxon's main contract. The new agreement also will require producers to provide more information to the nation in order to reduce information asymmetries.

(Source: Reuters)