The government released two new model Production Sharing Agreements (PSA) or in simple terms oil contracts for the upcoming auction of 14 oil blocks.
The new draft contracts are for shallow and deepwater areas offshore Guyana. The Ministry of Natural Resources in a statement on Tuesday revealed that with the release of the contracts, a 14-day consultation period also commences for the finalisation of the contracts.
“The draft Model Petroleum Agreements embody rigorous research and analysis by the ministry’s internal team, and external consultants on all topics relevant to a modern petroleum agreement for Guyana,” the ministry stated.
Further, the process involved a comprehensive assessment of the 2016 PSA and also identified best practices relevant to every contractual aspect of a modern agreement grounded in the Guyana context.
The statement revealed that new investments will be governed by a comprehensive framework of international best practices, as the draft PSAs will be followed by an overhaul of the 1986 Petroleum Act and Regulations.
It must be noted that feedback on the draft model agreements should be addressed to the Minister of Natural Resources and sent to [email protected] with the Permanent Secretary copied, [email protected]
The indicative Guyana 2022 Licensing Round Schedule will be updated at www.petroleum.gov.gy/guyana-offshore-licensing-round-2022 and www.nre.gov.gy which will reflect the new timeline for the publication of the finalised Terms and Guidelines, Model Petroleum Agreement and process of bidding — all adjusted to facilitate maximum participation from global interest.
The ministry related that official Expressions of Interests (EoI) have been received for all 14 oil blocks.
“The Model Petroleum Agreements represent the PPP/C Government’s commitment to its manifesto promise of establishing a model production sharing agreement (PSA), guided by industry standards and best practices.
“At the core, these are aimed at maximising the socio-economic benefits for our nation without disincentivising foreign investors in the sector. The Government of Guyana remains committed to a new era of oil and gas development, characterised by a competitive and favourable investment climate,” the statement read.
The bid round for the new oil blocks was launched last year in December and is expected to close by next month with contracts awarded by the end of May 2023.
See below the new Production Sharing Agreement for shallow and deepwater areas: