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Guyana’s finance minister says new PSA

model will be made public by end-February

GUYANA’S Finance Minister Ashni Singh
reported last week that the government was set
to present the first draft of a new model produc-
tion-sharing agreement (PSA) regime to the
public before the end of February.
Speaking to Members of Parliament about
the 2023 budget bill, Singh said Georgetown
had already revealed some details of its plans.
“We have announced the main elements of a
new fiscal framework, which will form the basis
of a draft new model PSA to be released in Feb-
ruary,” he stated.
He stressed that the new PSAs would be
more favourable to the Guyanese government
than the deal signed for Stabroek, the offshore
block that is home to the country’s first produc-
ing oilfields. Under the updated regime, royalty
rates have been raised from 2% to 10%, while the
cost recovery ceiling have been lowered from
75% to 65%, he noted. Georgetown will also
introduce a 10% corporate tax for the first time,
even as it retains the same 50:50 division of prof-
its after cost recovery between the government
and contractor that prevailed in the Stabroek
contract, he said.
Additionally, the minister stated, George-
town will introduce enhanced relinquishment
mechanisms under which investors must sur-
render portions of their licence areas at desig-
nated times if they are not prepared to begin
development operations. Investors will also have
to agree to make stronger work programme
commitments, he declared. The contest began last December (Image: Guyana Ministry of Natural Resources)
Singh went on to say that the new PSA
model would not be applied retroactively to the event that any discoveries suitable for commer-
Stabroek project. He explained, though, that it cial development were made.
would be applied to the blocks included in Guy- The new framework will take effect around
ana’s current deepwater bidding round, which mid-year, he said. “The expectation is for the
includes 14 licence blocks, and to ongoing new model PSA to be applicable for awards by
exploration projects such as Corentyne in the the end of the first half of this year,” he said. ™

Guyana to use World Bank loan funds to

expand capacity for oil sector oversight

THE government of Guyana revealed last week country’s oil and gas sector, which is growing as
that it has allocated GYD500mn ($2.37mn) for offshore production rises.
the purpose of expanding and improving its This sum is equivalent to 0.64% of the
capacity for oversight and management of the GYD781.9bn ($3.71bn) budget for 2023.

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