O 10% for new deals - Jagdeo

agdeo speaking yesterday

figure will drop to just over putting less. Reflecting risk, to exploration. Many of them ally,” he said. still remain globally competiploration in the context of net ectrum of countries and total th those that have very small sive major ones. We opted for oyalties, fixed royalties, some lty depending on the internal etc. So we did not go down a hard to monitor those. The ou against the downside when this if you if you have a varices drop, you lose,” he added. responsibility includes the oil government hired international t craft the fiscal terms for the ed that the proposals are globally competitive. “IHS market is a global consultant and they have (the pulse of) the industry,” he assured as he pointed out that currently some 65 countries across the globe either are in or currently preparing to go to auctions.

“IHS market that worked with us, they did most of the simulations. Internally we did them, and then they verified and dated simulations as to what the total take will be. They [IHS Markit] assured us at these levels, although they may seem high to some people - the 10% royalty, the 10% corporate tax… we remain very competitive.”

IHS Markit is the United Kingdom-headquartered data and information services provider and financial services firm that conducted the ExxonMobil US$460 million precontract audit back in 2019. Although it has been completed, government is yet to release its findings, with President Irfaan Ali promising this newspaper two months ago to look into its status.

Meanwhile, government is also sending a warning to companies that there will be strict relinquishment provisions as the new PSA will entail clauses which stipulate companies on the time they will have to work the blocks and the investment sums it intends to use.

“We are going to tighten up relinquishment provisions. In the deep, because of the complexity, you would have 10 years. That first initial three years, for both shallow and deep is for the seismic. And at that time when you move on to Phase 2, after the first three years, you will have to relinquish 50% of the block. So you have three years to do all your seismic and then relinquish 50% of the block, both for shallow and deep. Then we’ll give two extensions, one year each extensions…” he added while noting the additional five years will be to move on with their work programme.

“We are doing this because we want a greater turnover. We don’t want people sitting on the blocks. And if this comes back to government, it can go to subsequent auctions… we don’t want them sitting on it for three years, and then at the end of the three years, you hear ‘we can’t do anything, we moved forward, we need to relinquish it ’, and the country would have lost three years from potential development,” he added.

On the availability of remaining blocks, Guyana Geology and Mines Commission (GGMC) Commissioner, Newell Dennison, had in 2018, told this newspaper that from rough determinations, approximately 9,500 square kilometres are available within the coastal environment, 24,000 square kilometres within the environment of the continental shelf, 10,000 square kilometres within the deep water environment, and 9,000 square kilometres within the ultra-deep water environment.