Cybele Energy has until the end of July to pay its US$17 million signing bonus for Guyana’s offshore Block S7 or face the possible suspension or cancellation of its petroleum agreement, according to Natural Resources Minister Vickram Bharrat.
The government has given the Ghanaian company additional time after it said that it was experiencing issues with an investor, Bharrat said on the Starting Point podcast aired on Sunday. Cybele has since advised that it is finalizing an agreement with a new investor, which it expects will allow it to make the payment.
“Our legal team basically is in contact with them to ensure that they are in compliance with the agreement or otherwise we will have no other choice than to suspend or to cancel that agreement,” Bharrat said.
He said Cybele has requested another two to three weeks to complete the process.
“If I say safely, the ending of July will be the absolute cutoff date,” the minister said.
Bharrat said the government has shown some flexibility because the company has already established a local office, hired Guyanese staff, including a Guyanese country manager, and paid more than US$2 million in licence fees and environmental obligations.
“They’ve already paid up all of these fees. They’ve already set up the office. They’ve already employed and trained a number of Guyanese,” he said, adding that the government also wants to maintain investor confidence while ensuring contractual obligations are met.
Guyana signed the production sharing agreement for the Block S7 with Cybele late last year under the country’s new model petroleum agreement. The company committed to pay a US$17 million signing bonus, while the TotalEnergies-led consortium awarded another shallow-water block paid its US$15 million signing bonus.
The S7 award formed part of Guyana’s first competitive offshore licensing round. Under the country’s updated fiscal terms, new contracts include a 10% royalty, 10% corporate tax, a 65% cost recovery ceiling and an equal split of profit oil.
