(Reuters) – Guyana may revise terms of its latest oil-production sharing contract and its regulatory framework before a second offshore bidding round, Vice President Bharrat Jagdeo said on Tuesday.
Guyana last August updated the production sharing agreement (PSA) and Petroleum Act that set regulatory terms for producers ahead of a first oil round that drew bids for 8 of 14 blocks on offer. Contracts from that round have not been awarded.
The world’s fastest-growing oil producing country wants a robust framework that attracts foreign investment and delivers a fair compensation for the country, Jagdeo said in remarks during Guyana’s Energy Conference & Exposition.
Changes would aim to modernize regulatory terms and not necessarily directed to revising the fiscal terms, Jagdeo said.
Guyana in November 2022 raised royalties for future exploration to 10%, from 2%, and dropped the cost recovery ceiling to 65%, from the 75% applied to Exxon and its partners for current production.
The terms doubled Guyana’s share of oil proceeds to 27.5% from 14.5%, and added a new 10% corporate tax.
“It will be good for people at this conference to give us feedback on the regime that will establish the PSA is robust,” said Jagdeo.
The country’s first competitive auction of offshore blocks brought bids from two large consortia: an Exxon Mobil(XOM.N), opens new tab-led group with Hess (HES.N), opens new tab and CNOOC Ltd (0883.HK), opens new tab, and a separate group composed of Qatar Energy (QATPE.UL), TotalEnergies (TTEF.PA), opens new tab, and Malaysia’s Petronas, and a number of smaller companies.
Guyana is looking to expand its oil production while staying carbon negative and benefiting from its forests, Jagdeo said.
The country has a potential to raise up to $3 billion from preserving its forests, which cover 86% of nation, if there were market-based mechanisms to promote preservation, Jagdeo said.
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