Latest update February 8th, 2025 6:23 PM
Aug 20, 2019 News
British High Commissioner to Guyana Greg Quinn told media operatives yesterday that he will not get involved in the discussions relating to the one per cent royalty Guyana is to collect from one of the United Kingdom’s leading exploration and production companies, Tullow Oil.
Quinn explained, “From my point of view, the Tullow find last week is good for Guyana for two simple reasons; one it demonstrates that there is oil outside of the Exxon Block, so this isn’t about the Stabroek, it’s far bigger than that. Secondly, it brings in a whole new set of companies, a whole new set of countries and operators. The more operators and companies and countries involved in the oil fields, the better.
The contract terms are for Tullow and the Government to talk about, but fundamentally a find by Tullow is good for Guyana. The contract terms are for Tullow and the government to sort out, and I am not going to get into that discussion.”
It was only eight days ago when the oil giant struck black liquid gold at the Jethro-1 well, which is said to hold more than 100 million barrels of recoverable oil.
Following that discovery, Kaieteur News reported that Tullow Oil’s deal is worse than ExxonMobil’s Production Sharing Agreement (PSA), which stated that Guyana agreed to collect a one per cent royalty, but this meagre proportion is meant to be recovered by the operators of the block.
President of the Georgetown Chamber of Commerce (GCCI) Nicholas Boyer was keen to note that there are “varying terms” on both the ExxonMobil and Tullow Oil contracts.
Boyer stated that, “We need to move management of our oil industry out of direct control by political actors, insulate it and make it transparent, and when its transparent I think you’d see more of a harmonisation. We need to activate a petroleum commission…
I have always kept a single position; we need to set up our regulatory bodies for the oil industry… And even if we don’t staff it with the best we can always contract them on as-needed bases.
Therefore, you have lawyers and investment bankers, or energy consultants who could give you reviews, who can do studies across the world to see what the terms are in other PSAs across the world, and then highlight the risks and rewards for putting certain terms in or taking certain terms out. And then transparency would allow everyone to make their own judgment.”
The Department of Energy has said that it is looking to finalise a model PSA that will be used for future oil contracts.
Feb 08, 2025
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