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Tullow PSA: Guyana share of profit oil increases with production

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The Production Sharing Agreement (PSA) between Guyana and Tullow Oil in partnership with Eco Atlantic outlines a 1% royalty and a rolling percentage share of profit oil which begins at 50% and gradually increases to 60% for the South American country.

Guyana’s Ministry of Natural Resources published the PSA on Saturday as part of the government’s commitment to publicly release all contracts for oil exploration and production.

Under Article 11, profit oil shall be shared between the Government of Guyana and the Contractor for each field in the following proportions;

Production Per Day Guyana Share Contractor Share
First 25,000 bbls 50% 50%
Next 25,000 bbls 52.5% 47.5%
Next 15,000 bbls 55% 45%
Next 15,000 bbls 57.5% 42.5%
> 80,000 bbls 60% 40%

 

Tullow Oil, like ExxonMobil, can recover cost at a maximum of 75% of the total production of oil or natural gas.

Article 15 stipulates that Guyana’s share of profit oil includes royalty payable by the Contractor at a rate of 1% of crude produced and sold.

Tullow Oil has a 60% stake in the Orinduik block alongside Eco with 40%. A deal reached in September 2017 gave French oil major Total SA an option to acquire a 25% stake in Orinduik from Eco.

The exploration partners said in January that they had decided to move the Orinduik project into Phase Two of its license, committing to a new programme of seismic exploration to gather at least 1,000 square kilometres of 3D data off the Guyana coast.

Contingent on Total making a decision to buy into the project are positive results from the seismic data.

The agreement between Tullow Guyana B.V, Eco (Atlantic) Guyana Inc. and the Government of Guyana was signed on January 14, 2016.

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