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“We were not negotiating a production agreement” – Jagdeo on Payara licence

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Guyana’s Vice President, Bharrat Jagdeo, on Friday sought to provide clarity over the difference between the Stabroek Production Sharing Agreement (PSA) and the Payara Production Licence in response to comments made by the country’s Opposition Leader, Joseph Harmon, in wake of the approvals granted on Wednesday for the 220,000 barrels per day project.

Mr. Harmon, in a statement earlier on Friday, said the Opposition leant this week that the People’s Progressive Party Civic (PPP/C) led government “had signed a production agreement along with a five-year environmental permit to Exxon.” He said while the Opposition welcomes Exxon’s commitment to further invest in Guyana, it is however evident that “the PPP duped and deceived the people of Guyana as the agreement is in very similar terms to the agreement for the Stabroek block which the PPP, and Bharrat Jagdeo in particular, criticized endlessly while in the opposition.”

Mr. Jagdeo, in response, emphasized that the government was not negotiating the Stabroek PSA but was in fact focusing on the Production Licence for the Payara development, which is the 3rd project to be sanctioned offshore the South American country.

“The Stabroek block agreement governs all the licences that will be issued. The agreement deals with all the fiscal terms that will govern every development which has to be licenced separately in the Stabroek Block area,” Mr. Jagdeo said.

Mr. Harmon had said the PPP, while in opposition just a few months ago, had criticized the then government’s decision to sign the Stabroek PSA back in 2016, noting that Guyana should’ve received better terms.

The Vice President said the PPP’s criticism of the 2016 agreement still stands since they believe that “it did not serve the best interest of our people.” However, he reminded that while in opposition, they had made a commitment not to press for the renegotiation of the Stabroek agreement.

“Let me make it clear. We were not negotiating a production agreement,” Mr. Jagdeo said. “We made it clear that the production agreement was signed already and that Exxon, when it comes to future production agreements, which will happen when they start developing the Canje block and the Kaieteur block; that those agreements are going to be very dissimilar to the one that they signed for the Stabroek block.”  

The government on Wednesday granted approvals for the US$9 billion Payara development, the biggest investment in the country’s history, targeting an estimated resource base of around 600 million oil-equivalent barrels.

The project, targeting a 2024 start-up, will include 10 drill centers along with up to 41 wells, including 20 production and 21 injection wells. Along with Liza 1 and 2, it will push the country’s production to more than half a million barrels of oil per day.

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