Guyana has finalized its new model Production Sharing Agreement (PSA) with no changes to the fiscal terms introduced on March 14 during the country’s first oil blocks licensing round. The new PSA, which mandates a 10% royalty rate and a 10% corporate tax, is more stringent than the widely debated Stabroek Block deal, which has a 2% royalty rate. Additionally, the cost recovery ceiling has been lowered from 75% to 65%, while profit sharing remains a 50/50 split between the government and contractors.
Vice President Bharrat Jagdeo confirmed that future developments offshore Guyana, including ExxonMobil’s Canje block, will comply with the new PSA terms. However, the Stabroek Block terms remain the same.
S&P sees Guyana holding strong in oil and gas sector despite revised PSA | OilNOW
Following Guyana’s first oil blocks auction, six groups of companies have been awarded blocks and, according to Minister of Natural Resources, Vickram Bharrat, are ready to pay a total of $100 million in signing bonuses. These include TotalEnergies, ExxonMobil, International Group Investment Inc., Liberty Petroleum Corporation, Delcorp Incorporated, and Sispro Inc. The companies are required to pay their signing bonuses upon sealing their contracts.
Minister of Natural Resources, Vickram Bharrat, stated that the government will not sign agreements with companies that are not ready to pay the signing bonus at the time of signing. He added, “It was the intent of the administration to ensure all the companies were on the same page regarding any tweaks to their respective PSAs.”
Guyana’s offshore basin, with an estimated reserve exceeding 11 billion barrels of oil equivalent in the Stabroek Block alone, continues to attract global attention since the discovery of oil in 2015. The basin is now considered the gateway to the world’s fastest-growing super basin, with potential resources surpassing 25 billion barrels of oil equivalent.
