Guyana Seeks Partner to Review Yellowtail Oil Project

The Guyanese government is seeking proposals from potential partners for a review of the Field Development Plan (FDP) drawn up for Yellowtail – Guyana’s fourth petroleum oil development in recent years as the Caribbean nation emerges as a major oil producing country.

A photo of Guyana's Minister of Natural Resources Vickram Bharrat accompanying article on the country's Yellowtail oil development
Guyana’s Minister of Natural Resources Vickram Bharrat

In a recently published Request for Proposals, Guyana’s Ministry of Natural Resources “invites eligible consultants” to submit bids for the execution of a comprehensive review and evaluation of the Yellowtail FDP.

That means reviewing the Yellowtail FDP, all supporting and reference documentation, and a related environmental and social impact assessment (ESIA) submitted by the license holders – a consortium led by ExxonMobil. 

SEE ALSO: Register a Business in Guyana: a How-To Guide

The findings will then need to be submitted to the Ministry in a formal report setting out opinions formed during the evaluation, as well as identifying “deficiencies, unresolved issues and areas of additional assessments or technical analysis” that Guyanese authorities should request from the licence holders before making a determination on the FDP.

The report will also need to address compliance and non-compliance with regard to the country’s existing legislative and contractual framework – with particular emphasis on international best practice and industry standards, as well as relevant Guyanese legislation, such as the Petroleum (Exploration and Production) Act 1986 and the Environmental Protection Act 1996.

On top of that, the chosen partner will need to support the Ministry of Natural Resources during engagements and information exchanges with the licence holders, as well as assisting in the drafting of the Yellowtail Petroleum Production Licence.

Proposals must be submitted no later than January 20, with the winner being chosen based on their eligibility, the substantive response of the proposal to all major points laid out in a comprehensive supplementary information document, and the competitiveness of the bid.

Proposals should be valid for 120 days following the deadline. Meanwhile, in support of the decision-making process, all bidders must be prepared to provide specifics regarding the cost break-down and other details contained within the proposal.

It is expected that contract negotiations with the chosen provider will commence on February 1, ahead of the commencement of the assignment one week later, according to the Guyana Chronicle

Yellowtail latest development in Guyana’s rise as oil power

Yellowtail is just the latest oil development in Guyana’s Stabroek Block, a 6.6 million-acre area located 126 miles off the Guyanese coast, where ExxonMobil has already received approval for three other oil development projects.

ExxonMobil leads a consortium that holds the licences for Guyana's recently discovered oil deposits, including the Yellowtail oil development
ExxonMobil holds the licences for Guyana’s oil fields

ExxonMobil has made a series of major discoveries in the Block in recent years, with reserves believed to total more than 10 billion barrels of oil. 

The Yellowtail development is scheduled to commence production in 2025 and expected to yield 250,000 barrels of oil per day during a 20-year production period, generating at least 1,300 jobs in the process.

Guyana’s emergence as a significant oil producer has driven staggering economic growth for the country, with gross domestic product (GDP) growth hitting 43.5% in 2020, at a time when most of the world’s economies were being battered by the COVID-19 pandemic. 

While GDP growth in 2021 was around half that seen the previous year, the World Bank has predicted that it will hit almost 50% in 2022.

Oil just one prime investment opportunity in Guyana

While the licences for Guyana’s newly-discovered reserves have already been awareded, the Request for Proposals for the Yellowtail FDP is just the latest example of the ancillary opportunities on offer to those working in the oil sector.

Earlier this year, the Ministry of Natural Resources relaunched a process to find a partner to market its share of the crude oil already being extracted by the ExxonMobil-led consortium, which also includes the likes of Hess Corp and China’s CNOOC.

Yet oil is just one sector in which major investment opportunities can be found in the country, which is located in the northeast of South America, bordered by Brazil, Suriname, and Venezuela.

Other business opportunities in Guyana include mining for precious metals, with the country famed for its major gold reserves.

Meanwhile, the government of Guyana has made significant effort to promote and develop the tourism industry, with Minister of Tourism, Commerce and Industry Oneidge Walrond declaring in November that the country is in “dire need” of more hotels.

According to Walrond, an official visit to the country from Kenyan President Uhuru Kenyatta had to be cancelled due to the unavailability of necessary accomodation for the dignitary and his entourage.

A number of high-profile hotel brands are currently engaged in developments in and around the Guyanese capital Georgetown, while it was announced in October that 6,000 Guyanese would be sent to Barbados for hospitality training as part of efforts to further develop the tourism industry.

So while the Yellowtail development will add to the gorwing interest in Guyana’s oil sector, considerable investment opportunities can be found in this rapidly growing economy,

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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.

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