Speaking at a press conference on Monday, Guyana’s Vice President, Bharrat Jagdeo, reaffirmed the government’s position on the Stabroek Block Production Sharing Agreement (PSA), noting that it will not seek to renegotiate the deal but will however, be looking to ensure the terms and conditions for other blocks change.
The fiscal terms and conditions of the Stabroek agreement, first entered in 1999 then amended in 2016, have come in for criticism over the years with some describing it as being too favourable to operator ExxonMobil, and its co-venturers, Hess and CNOOC.
While ExxonMobil and some analysts in the industry have said that the PSA is in line with agreements other countries at a similar stage of their oil and gas development have entered, others maintain that the deal is flawed and have been pushing both the previous and current governments to renegotiate.
“We made it clear through the campaign that at this point in time we are not renegotiating the Stabroek agreement,” Mr. Jagdeo said. “But Exxon…they’re the operator and one of the major shareholders in both the Canje and Kaieteur blocks…when they come up for licensing on those blocks, they will not get the same conditions as they got in the Stabroek Agreement that was signed under APNU [previous government].”
Before 2015 when ExxonMobil made its first world class discovery at the Liza field, offshore Guyana was considered a “high-risk frontier basin” with 45 wells drilled over a span of 50 years resulting in no commercial discovery.
Since then, more than 8 billion barrels of oil equivalent resources have been found at the Stabroek Block, spanning 18 discoveries.
“We’ll continue to work on – in fact we will work on a standard Production Sharing Agreement…or a standing agreement which all future operators will have to subject themselves to,” Mr. Jagdeo stated.