Guyana extended its bid round beyond the original May deadline, because government needed more time to consult on a revision of its oil laws.
Vice President Dr. Bharrat Jagdeo revealed this Thursday during a media conference, a day after the Ministry of Natural Resources announced the new deadline as July 15, 2023.
The government had indicated upon the release of the draft model petroleum agreements for the round, that an amendment of the Petroleum (Exploration and Production) Act is needed to ensure the configuration of the bid round is consistent with law. The principal Act is the principal law governing Guyana’s oil and gas sector, and has been in force since 1986.
Key to the review process of any law in Guyana is a period of consultation with the public. The government will therefore be expected to publish a draft of its proposed amendment. Based on comments received during the period, the government may determine that it will revise the draft. It would then take the law to Parliament for review by its members. At that juncture, there would be live debate between government and opposition before a vote. Because the administration has a simple majority in the House, the law is expected to pass without issue.
The government will also petition the House to approve an amendment to the Corporate Tax Act to include a 10% income tax for companies operating under the agreements to be issued in the bid round. This will form part of the new fiscal framework announced for future oil blocks. Other new features, including a 10% royalty and 65% cost recovery ceiling, will be written directly into the contracts.
Thus far, all 14 of Guyana’s offered blocks have received interest, with 25 billion barrels at stake. Click here to get more details on the Licensing Round: https://oilnow.gy/glr2022/