Incentives contained in ExxonMobil PSA not unique to Guyana – MNR

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Raphael Trotman, Guyana's Minister of Natural Resources

The Ministry of Natural Resources on Tuesday urged that members of the media fraternity in Guyana acquaint themselves with industry specific knowledge and an understanding of the basic principles of contract regimes in oil and gas so that they could report accurately on the recently released ExxonMobil Production Sharing Agreement (PSA).

This is according to a press release sent out in response to an article in a daily publication captioned; “Govt. pre-approves uncapped importation for ExxonMobil”. Further, the Ministry said it stands ready to assist Guyanese journalists to come to grips with the subject of oil and gas through partnerships with private sector entities.”

Guyana’s agreement with ExxonMobil, Hess and CNOOC Nexen is a Production Sharing Agreement (PSA) the Ministry said, “not dissimilar to such agreements in other parts of the world and whose Production Sharing Agreements contain the same or similar incentives. The primary reason why, for example, China, Azerbaijan, Angola, Ghana and almost every country (a list will be provided) who utilize a PSA exempt Export and Import Duties on materials and equipment specific to upstream petroleum operations is that ownership of such; the equipment and the installations built, become the property of the host government.”

The release said the Ministry joined with the Government of Guyana in expressing vindication regarding the release of the ExxonMobil PSA and that the now public document confirms that Guyana stands to benefit from “social, infrastructural and economic transformation…” It noted too that Government’s “aggressive pursuit” of the Extractive Industries Transparency Initiative (EITI) is testimony that they “committed to public accountability…”

The PSA was released to the public on December 28, 2017 after months of calls for it to be made public.