After giving Guyana the lopsided Stabroek Block deal, Opposition still to contribute to new model agreements

May 07, 2023 News

Kaieteur News – After giving Guyana the lopsided Stabroek Block Production Sharing Agreement (PSA), it appears that the Opposition is unwilling to contribute to the development of the new model contracts proposed by the government.

According to Vice President Dr. Bharrat Jagdeo, the Opposition has not submitted any comments on the draft PSAs published by the government earlier this year. Despite the criticism that the consultation period was too short, the government did not extend it, but Jagdeo said the government will continue to accept comments until the contracts are finalised.

The Vice President, during a press conference on Thursday, expressed concern for at least the second time, about the lack of interest by stakeholders in commenting on critical draft legislation and other important documents released by the government for feedback.

He remarked that critics are often talkative in the press, but would send little to no commentary through the consultative process the government has established to improve legislation. Jagdeo said that “a lot of garbage gets written goes down as fact because they don’t have a robust contestation. They’re not required to defend their views publicly because then you’ll see how shallow the views are.”

The Opposition was among the critics of the government’s decision to set a 14-day period for the submission of comments. However, their reluctance to participate in the production of a better deal for Guyana is concerning, considering that the parties which make up the main opposition, A Partnership for National Unity (APNU) and Alliance For Change (AFC), gave Guyana the Stabroek Block PSA while they were in government. And that PSA is widely recognised as lopsided and unfair to Guyana. Jagdeo himself has described the contract as “shitty”. The fiscal terms have been the subject of criticism from various stakeholders in Guyana ever since they were published.

The participation of stakeholders in the production of a better deal for Guyana would go a long way to ensure that the country can maximise benefits from the exploitation of its natural resources.

The new model PSAs proposed by the government will feature a 10% royalty rate, which is a significant increase from the 2% royalty rate in the Stabroek Block PSA. The sharing of profits after cost recovery will remain 50/50 between the government and the contractor, and a corporate tax of 10% will be applied. The 75% cost recovery ceiling has also been lowered to 65%.

Despite the deadline for comments having passed, the Ministry of Natural Resources of Guyana is still accepting comments on the draft model PSA, which will apply to the ongoing bid round. The government has set a new deadline of mid-July for the submission of bids for the 14 offshore blocks, giving the government more time to update legislation.

The government will also seek a revision of the Petroleum (Exploration and Production) Act to facilitate the bid round and of the Corporate Tax Act to include a 10% income tax for companies engaged in petroleum operations under the new contracts.

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After giving Guyana the lopsided Stabroek Block deal, Opposition still to contribute to new model agreements

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After giving Guyana the lopsided Stabroek Block deal, Opposition still to contribute to new model agreements

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