As Guyana embraces its status as an oil producing nation Minister of Finance, Winston Jordan said the government will revise the existing template of the Production Sharing Agreement (PSA).
This move is “imperative” to “safeguard the rights of our nation to a fair share of resource wealth” Minister Jordan was quoted by DPI as saying on Monday during his 2018 National Budget speech in the National Assembly.
PSAs are common contractual agreements for petroleum exploration and development between governments and companies.
While the government has not fully disclosed its contract with ExxonMobil, it shared that Guyana will receive a royalty of two percent on gross earnings and benefit from 50 percent of the profits from the sale of petroleum once production commences in 2020. The company is developing the Liza field located in the Stabroek Block offshore Guyana for first oil by 2020.
Exxon’s exploration in the Stabroek Block has since de-risked Guyana’s offshore basin which is estimated to contain at least 7 billion oil-equivalent barrels. The Stabroek Block itself is estimated to contain between 2.25 – 2.75 billion oil-equivalent barrels.
Minister Jordan said the revision, which will be undertaken in 2018, seeks to make the PSA “more accommodating to changing commodity prices while maintaining a level of progressivity that is responsive to profitability”.
Next year, the government will publish a green paper in the National Assembly on the proposal for the SWF. The paper is to seek feedback for further refinement and to stimulate a national discussion to ensure that all citizens understand the benefits to be had and what the country must guard against in the collection and management of its oil resources, DPI said.