Guyana is moving full steam ahead to award more oil concessions, but this time it would be done through a competitive system instead of striking one-on-one deals, Head of the Ministry of the Presidency’s Department of Energy, Dr. Mark Bynoe announced Monday.
“This is likely to be a bid round” Bynoe told a press conference he shared with British oil and gas Advisor, Matthew Wilks.
Bynoe said that his Department completed the development of its best practice Production Sharing Agreement (PSA) template last December and it would be used when the new licensing begins and onward.
He explained that since there are varying exploration shelf conditions here, new PSAs would not be a one-size-fits-all but each catering to get the best deal for both country and investor. “This is going to be used in new licencing rounds going forward. Let me emphasize, it’s a template, meaning that we will vary differing conditions depending on how we are engaging,” he said. “It will always be a balancing act on what Guyana wants and how Guyana perceives to get what Guyana wants” said Bynoe, who is a Resource Economist.
Wilks, who is a veteran oil and gas expert having served in several other countries and multinational companies, said the new PSAs would take into account the investment conditions. “If you are investing in deep water with all the risks that that takes, that would be a different investment climate to investing offshore and the same for the near shore. So you could very well have three subtly different PSC [Production Sharing Contract] structures for different investment environments,” Wilks explained.
Wilks underscored that the PSAs would be modelled to ensure both government and investors get what they want.
Guyana is expected to begin commercial oil production in late 2019 or early 2020 at a rate of 120,000 barrels per day and soaring gradually to more than 750,000 barrels per day by 2025 as more wells are discovered to production stages.