Ali not disappointed by low bids in first oil block auction

Last Updated on Thursday, 14 September 2023, 7:33 by Denis Chabrol

President Irfaan Ali on Wednesday shrugged off suggestions that bids for a mere six bids for the 14 offshore oil blocks did not meet his government’s expectations.

“I’m not disappointed.  I think this is a tremendous accomplishment given the circumstances of the market and the realities we are operating in,” he told an Inter-American Dialogue forum in Washington DC, in response to a participant who noted that none was from India.

The President reasoned that the low response to the auction was due to a virtual lack of financing options by major economies.  “For a matter of fact, in this market- and let us be very open and factual about this- we went out to auction at a time when major economies in the world are basically saying to oil producers ‘we’re not going to finance you’ so you’re going to a market where raising of capital is an issue,” he said.

He said other countries have held auctions but “got no response,” unlike Guyana that went with 14 blocks and received expressions of interest for eight blocks.  “We are very happy. We got response for eight of the 14 blocks we went out for and that is significant. That cannot be minimised in any way, shape or form because there are many countries that went out and got no attraction,” he said.

Bilaterally, he said a number of countries including India, Qatar and the Dominican Republic were interested in exploring for oil in Guyana in a government-to-government arrangement. However, he said government preferred to “put all the blocks out there” and have an open, public and transparent process. “We have been able, as a newcomer in this business to demonstrate great transparency and openness in putting out the blocks for a public auction and what we have seen is a number of the major companies who have the wherewithal are part of the auction,” he said.

They included the France-headquartered TotalEnergies, United States’ ExxonMobil and Hess as well as China National Overseas Oil Corporation.

Noting that the United States had vetoed an Inter-American Development Bank loan to a private Guyanese business in the oil sector, Dr Ali said 53 percent of the energy still comes from petroleum. He suggested that there needed to be sufficient energy for the growing middle class in India and China.