Guyana’s Natural Resources Minister Vickram Bharrat told Members of Parliament last week that the change of government in a country should not result in instability and lack of predictability, particularly regarding agreements that were in place and on which companies are making investments.
Seven years after the discovery of oil and gas, calls continue to me made for the 2016 Stabroek Block Production Sharing Agreement (PSA) between Guyana and ExxonMobil to be renegotiated so that certain provisions regarding the country’s fiscal take would increase.
But Mr. Bharrat asserts that such a move would only hurt the investment climate.
“We have to be frank, there is no country or foreign company like Shell, Chevron, Total and Exxon that would want to invest where there is no stability or predictability and [where], when a government changes, there is renegotiating of a contract,” he said. “It would hurt the investment climate, so we are safeguarding the image of the country. We are making Guyana an investment destination.”
The government has been working to market Guyana as a world-class investment destination, and plans to auction offshore blocks later this year to ramp up exploration activity. It has also made it clear that future contracts for oil blocks would have different terms.
Profit share, royalty, ringfencing, taxation for major upgrades in Guyana’s new model PSA – VP
Vice President, Dr. Bharrat Jagdeo has said that Guyana will seek to maximize its take through prudent administration of the 2016 PSA. Since assuming office, the government has introduced the Local Content legislation which seeks to ensure Guyanese nationals and companies get first preference for contracts and jobs in a broad range of categories.
The administration has also implemented tougher requirements for the protection of the environment as more oil production projects are approved.