…will share profits 50/50 after deducting investments
Exxon Mobil and its partners will pay Guyana a two per cent royalty on all oil extracted offshore Guyana from is wells, in addition to sharing 50 per cent of the net profits—profits declared after the initial investments would have been repaid from any earnings.
The Guyana Government through the Ministry of Natural Resources yesterday announced that it is preparing to issue a Production Licence to Exxon Mobil—one of the requirements before the developers make their Final Investment Decision (FID) for the project in June 2017.
The Production Licence, according to a Ministry statement will “move ahead in 2020; whilst placing emphasis on Guyanese employment and training, the procurement of goods and services in Guyana, infrastructural soundness and the protection of the environment.”
According to the Natural Resources Ministry, “The Government and people of the Cooperative Republic of Guyana will receive a royalty of 2 percent on gross earnings and benefit from 50 per cent of the profits from the sale of petroleum once production commences.”
Government in its statement said too “following consideration by the Cabinet the findings of the various reports will be released.”
Extraction from the Exxon Mobile Liza field is expected to commence in 2020 at an initial rate of 100,000 barrels of crude per day in the first phase.
The operation is expected to commence with a Floating Production Storage and Offloading (FPSO) vessel providing the main infrastructural support for the project.
According to the public missive “the Ministry of Natural Resources and other Ministries and Agencies are actively pursuing a number of undertakings on the policy, legislative and infrastructure sides to ensure that the country is prepared for the coming oil production.”
The move comes following reviews of the technical and environmental aspects of the Liza Project – Development Plan that was submitted by Esso Exploration and Production (Guyana) Ltd (EEPGL) in December, 2017, which prompted the move towards granting a production licence to ExxonMobil for production of petroleum from 2020.