Guyana to earn 1M barrels only after Exxon & partners get 8M...

Guyana to earn 1M barrels only after Exxon & partners get 8M…

Nov 12, 2019 News

country then has to pay taxes for oil companies from its share

Guyana will only qualify to uplift its first earned million barrels of oil, after ExxonMobil and its partners, HESS Exploration and CNOOC-Nexen would have collected two turns each or almost eight million barrels of oil.
This, since the country would have only earned 570,000 barrels of crude out of the first four million barrels to be recovered.
This includes 80,000 barrels of royalty on the first four million barrels while 490,000 barrels would represent Guyana’s 12.5 percent profit split after the recoverable amount has been taken out.
The country will then have to market this oil, after which it will be paying the taxes due for the companies involved.
Department of Energy Director, Dr. Mark Bynoe, in an interview with this publication yesterday sought to clarify just how the country would be receiving its oil dues.
He told reporters this past week that ExxonMobil (Esso Exploration and Production Guyana Limited) will be taking the first entitlement of crude to be produced by the Floating Production and Offloading Vessel (FPSO), the Liza Destiny.
According to Dr. Bynoe, the parties would take turns in uplifting their entitlements and while Guyana would not be collecting its share upfront, the records will be reconciled.
The Production Sharing Agreement (PSA) that was inked between Guyana and the parties stipulates that the country will be paid a royalty of 2% for every barrel of oil produced and sold.
This means that on the first four million barrels of oil produced (one million each to be collected by each party), Guyana would earn a royalty of 80,000 barrels of oil.
The profit to be had from the first four millions will be 490,000 barrels of oil. This means that in order for Guyana to earn its first million barrels of oil, then the remaining partners will have had earned just under seven million barrels of oil.

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