The first draft of Guyana’s new model Production Sharing Agreement (PSA) is expected to be finalised in the coming week, said Minister of Natural Resources, Vickram Bharrat.
The government had touted a February date for its release but that is unlikely, since according to Minister Bharrat, it is still being fine-tuned.
“We have international consultants from the United States working on that and it should be finalised very shortly. I would say maybe another week or so, maybe in another week, we will have that finalised,” he explained.
Bharrat noted that representatives from the US consultant team will soon arrive in Guyana to assist its local technical team. And once the crucial document has received the all-clear from Guyana’s cabinet, it will be available for public perusal.
“It will be public, like all of the contracts that we have made public,” he assured.
A 10% royalty rate will head the new model agreement, up from the 2% paid by the Stabroek Block co-venturers. The 75% cost recovery ceiling has been lowered to 65%. The sharing of profits after cost recovery will remain 50/50 between the government and the contractor. And a corporate tax of 10% will be instituted, where there was none before.
Those terms will apply for blocks issued from the ongoing licensing round and will also be imposed on any current contracts outside of the Stabroek Block if a discovery is made and moves to production.
The decision to not apply the new terms to the existing Stabroek Block agreement has been criticised as being too favourable to the Exxon-led consortium operating offshore.
Get more information here: Guyana Licensing Round 2022 – Ministry of Natural Resources | OilNOW