Vice President Dr. Bharrat Jagdeo has confirmed that the government will give approval to Tullow Oil Plc for the sale of its operating interest in the Orinduik Block to Eco-Atlantic Oil & Gas Ltd. This agreement marks Tullow Oil’s exit from the block, with Eco-Atlantic poised to take over as the operator.
Speaking at his press conference held at Freedom House today, Dr. Jagdeo indicated that both the Ministry of Natural Resources and the Guyana Geology and Mines Commission (GGMC) have been formally notified of Tullow Oil’s intent to sell. He however noted that this development should prompt the Ministry and the GGMC to organize a separate press briefing addressing contract management concerns, including those related to outstanding prospecting licences and production licences.
Eco-Atlantic, a prominent offshore oil and gas exploration firm focusing on Atlantic Margins, recently acquired a commanding 60% operated interest in the Orinduik Block, situated offshore Guyana. This acquisition was orchestrated through Tullow Guyana B.V., a subsidiary of Tullow Oil Plc.
The sales purchasing agreement, inked by Eco-Atlantic, comprises a fusion of upfront cash and contingent considerations. Eco-Atlantic has clarified that this strategic move aligns with its commitment to generate substantial value for stakeholders through vigorous hydrocarbon exploration in globally renowned petroleum basins.
Formerly holding a 15% working interest in the Orinduik Block, Eco-Atlantic will now ascend to the role of operator and majority interest holder. Its subsidiaries, Eco Guyana and Eco (Atlantic) Guyana Inc., collectively hold an impressive 75% aggregate participating interest. This transformation enables Eco-Atlantic to spearhead the exploration process and execute its strategy to foster collaborative partnerships with new associates.
Eco-Atlantic made an initial cash payment of US$700,000 upon the transition of Tullow’s 60% stake interest and operatorship of the Orinduik license to Eco Guyana. Furthermore, the agreement entails contingent considerations linked to specific milestones. These include a US$4 million payment in the event of a commercial discovery, a US$10 million payment upon the issuance of a production license from the Guyanese Government, and future royalty payments amounting to 1.75% of the 60% participating interest entitlement revenue, net of capital expenditure and lifting costs.
Presently, Eco-Atlantic’s primary focus revolves around securing new partners for the Orinduik Block. With the government’s impending approval, Eco Atlantic is poised to expand its presence and influence within the dynamic energy sector.