The Ministry of Natural Resources of Guyana continues to accept comments on the draft model Production Sharing Agreements (PSA), which will apply to the ongoing bid round. Despite the deadline for comments having passed, Vice President Dr. Bharrat Jagdeo has stated that the government is still open to receiving feedback.
The government has set a new deadline of mid-July for the submission of bids for the 14 offshore blocks, thereby giving the government more time to update applicable legislation
The Vice President emphasized that, with the new contracts, the government is looking to attract investment in the oil and gas sector and ensure Guyana receives more benefits from the fiscal side, such as more business flowing to Guyanese companies and nationals through the local content framework. Additionally, the government wants a PSA that can properly regulate the sector from a safety and environmental perspective, with an eye towards the need to move to a decarbonised world, the VP said.
While there is a lot to advocate for, with respect to Guyana’s benefit, Jagdeo also discussed the need to offer incentives to bidders. He explained that there is significant competition for investment dollars in the oil and gas sector, with many countries vying for attention from global companies through similar bid rounds as Guyana’s. He stressed the importance of maintaining momentum in the industry, not just for the oil and gas companies but for all Guyanese who are building businesses around this emerging industry. Therefore, the Vice President said government is also accepting comments from oil companies, and that the PSA reflects a balancing act between Guyana’s interests and theirs.
To support the bid round, the government will seek a revision of the Petroleum (Exploration and Production) Act to regularise the bid round, and of the Corporate Tax Act to include a 10% income tax for companies engaged in petroleum operations under the new contracts. Click here to get more details on the Licensing Round: https://oilnow.gy/glr2022/
