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Ramotar gave construction company oil block, operations at standstill

Apr 10, 2018 News

NABI Oil and Gas Inc, whose parent company is NABI Construction, was able to secure an oil block in the Guyana Basin. The company was given the block less than two years after it was set up in October 2010.
By June 2012 President Donald Ramotar and Company Secretary/Director of Nabi Oil and Gas Inc., Rafael S. Nabi, had already signed an agreement similar to other existing contracts.
The company was granted a lease for 2,300 square kilometres onshore in the Mahaica-Mahaicony, East Coast Demerara area. This area is considered part of the Guyana Basin which encompasses both onshore and offshore.
According to the Ministry of Natural Resources, the company’s activities are dormant.
The Ministry said that during the last quarter of 2013, the company conducted a geochemistry survey and was supposed to be analyzing the data it had gathered, but “the company’s activities have been dormant since that time.”
The Ministry also released the Production Sharing Agreement (PSA) that was signed in 2012. That agreement did not include a signing bonus. It features a cost-recovery ceiling of 70 per cent pegged on the price of oil being US$100 and above per barrel and 75 per cent should the price fall below US$100.
The remaining 25 per cent or 30 percent portion of profit oil will be split between the contractor and Government on a 50/50 basis if production remains below 50,000 barrels per day. Should it top that level, the production will be shared on a 55/45 in favour of Government. Royalty is one per cent payable from the Government’s share of the profits.
The PSA also features a Stability Clause similar to those in the ExxonMobil, CGX and Tullow/Eco-Atlantic contract.
Nabi’s contract also features the cheapest annual licence fee when compared to the other contracts. That company has to pay US$10,000 per year.

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