Gov’t upping oil royalty rate to

will be $10 million in the shallow area…if you win a bid, you’d have to pay that money over as a signing bonus. So we are not restricting how many blocks you can bid for but we’ve decided to limit the award to three to any company. So there is a maximum of three. While you can tender for all the blocks, you wouldn’t have to do so and list your preferences so we get a more competitive pay for all the blocks, but the award to a company will not be more than three blocks maximum,” Jagdeo explained.

Each bidder will be required to put up a work programme because the criteria for assessing the bids will be weighted between the price and the work programme, he also pointed out.

What we wanted

And even as it still believes that the current PSA with ExxonMobil is lopsided in the US oil major’s favour coupled with the fact that it holds true to sanctity of contracts, the new terms, according to Jagdeo, reflect what government hoped should have been put to ExxonMobil by the former government.

The highly controversial PSA between Guyana and the Stabroek Block co-venturers states that up to 75% of the revenue earned from production could be used for expenses and to recover the companies’ investment (to date over more than US$9 billion), while the remaining 25% – profit oil – is to be split evenly between them and Guyana. Royalty stands at 2% of the production.

The quantity of blocks assigned and relinquishment provisions have also been contentious issues as the Stabroek Block is made of some 6.6 million acres.

“Given what we wanted at the beginning; a greater share of the revenue for the government and the people of Guyana; we believe we will succeed and with this new fiscal formula, [gain] significantly a greater share of the proceeds. We wanted that. That was one of our objectives,” the vice-president said.

The other objective, Jagdeo related, was to swiftly attract major oil companies here to maximize on time, as global green demands will continue to make it difficult for fossil fuel producers.

“We know already that the funds are scarce, largely because of net zero (carbon) targets. It’s harder to raise money now for the oil and gas sector. We’ve had cases where loans are vetoed. So it’s becoming more and more difficult to finance oil in the oil and gas sector. We have seen globally from these international oil companies, 70% to 80%, historically, of their total CAPEX, go to upstream activities. And by 2025 this f 60%. So they themselves are they’re putting less money int they’re selling off assets globa

“A second objective was s tive and to accelerate the exp zero. So we looked at the sp government take, starting wit takes and those that have mas a simple formula with fixed ro countries have variable royal rate of return on the project e complex system because it’s fixed royalty also protects yo oil prices drop. So you’ll get able royalty, and when oil pric

Pulse

The Vice President, whose and gas sector, informed that g experts IHS Markit to help it new PSA and they have assure