Sispro Inc., a consortium led by Guyanese women, is among four companies that will be signing Production Sharing Agreements (PSAs) with the Government of Guyana (GOG) in October. The agreements cover offshore oil blocks awarded in the country’s inaugural bid round, launched in December 2022.
This was disclosed by Minister of Natural Resources, Vickram Bharrat, during an interview on the Starting Point Podcast- the Oil and Gas Edition.
The minister acknowledged that the process has taken some time, noting that the government first had to update the PSA model, ensuring improvements for shallow water and deepwater development offshore Guyana. He stressed that negotiations had to be conducted with the companies that submitted bids.
Minister Bharrat noted that while the government could have moved ahead with some contracts that were tweaked following discussions with some companies, it opted to wait to ensure a unified PSA model is being used.
“We didn’t want a PSA for ‘X’ company, a PSA for ‘Y’ company, a PSA for ‘R’ company. We wanted a PSA that will be (agreed upon) and signed by all companies…that is industry standard, and that is world class, and that will bring better benefits to Guyanese in comparison to the 2016 Stabroek Block PSA. So that took some time,” the minister said.
He added that four companies have already been contacted in relation to the signing. “We have already made contact with those companies. They know themselves by now, so we’re looking to sign that agreement in October with those four companies,” the minister said.
Minister Bharrat confirmed that Sispro Inc. is among them, stating he is proud of an all-Guyanese women team entering the exploration phase of the oil and gas sector.
Guyana’s inaugural auction featured 14 blocks, with bids received for eight. Sispro Inc. was awarded a shallow water block, S3, and a deepwater block, D2.
“To date, we have successfully negotiated a PSA for the block in the shallow water, with Sispro, so we are moving ahead with that, and then at some point in the future, once we conclude the negotiation, for deepwater one, we will move forward with that,” Minister Bharrat said.
Moreover, ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited were awarded the shallow water block S8.
TotalEnergies EP Guyana B.V., in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas SDN BHD, secured shallow water Block S4. International Group Investment Inc. was awarded two shallow water blocks, S5 and S10. Liberty Petroleum Corporation and Cybele Energy Limited won shallow water block S7, while Delcorp Incorporated, a Guyanese company in partnership with Watad Energy and Communications Ltd and Arabian Drilling Company, was awarded a deepwater block, D1.
The Ministry of Natural Resources last year disclosed that four companies accepted the new PSA. Unlike the PSA governing Exxon’s Stabroek Block operations, which carries a 2% royalty and stipulates that the oil companies’ taxes be paid by the state, the new PSA requires a 10% royalty and a 10% corporate tax. It also caps cost recovery at 65%, with profits split 50-50 between the State and companies. By contrast, the Stabroek PSA allows ExxonMobil to recover up to 75% to cover costs.