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Company that won two oil blocks in Guyana happy to pay 10% taxes, 10% royalty
Kaieteur News- International Group Investment Inc., one of the companies awarded oil blocks in Guyana’s maiden auction, has expressed satisfaction with the government’s fiscal terms under the new Production Sharing Agreement (PSA).
The company, led by Chief Executive Officer (CEO) Dr. Levi Wilson Odoe, secured two shallow-water concessions, S5 and S10, during the auction that commenced in December 2022.
The Government of Guyana initially put 14 blocks on offer, but received bids for eight. The PSA framework includes a 10% royalty on oil production and a 10% corporate tax. Additionally, cost recovery is capped at 65% annually, with profits split evenly between the government and operators. The fiscal terms of the new PSA have improved on those of the PSA that was signed with ExxonMobil Guyana Limited for the Stabroek Block. That deal requires a meagre 2% royalty, no taxes, 75% cost recovery ceiling each month which leaves 25% of profit to be shared with Guyana.
During a recent interview with this publication, Dr. Odoe, a lawyer and international arbitrator, highlighted the favourable business environment in Guyana as a key reason for the company’s participation in the auction. “I like stable government, because we are business people, we are not politicians. Any government that comes, as long as you create an enabling environment to do business, we are happy,” he said.
International Group Investment Inc. and Sigmund executives (Company that won two oil blocks)
He also emphasised the company’s agreement with the PSA terms, noting, “We have reviewed the PSA with our lawyers, and we are very happy with the cost recovery, the signature bonus, and the royalties. We are happy with all the terms and conditions.”
Dr. Odoe revealed that his company is in the process of finalizing documentation required by the government before they move along with the process. “We are submitting this week,” he said, expressing confidence that the process would conclude smoothly.
Dr. Levi Wilson Odoe, Lawyer and International Arbitrator
“We are ready to go, once we discover commercially viable oil, the finances are there to start operation almost immediately,” he noted.
IGI is teaming up with Nigerian company Sigmund Oilfields Limited for the development of the oil blocks. Dr. Odoe noted that he invited Sigmund to Guyana as he is confident in the company ability to execute works offshore Guyana. Sigmund’s General Manager Chris Ubah disclosed that the company is experienced in oil and gas exploration, production and seismic survey. He added, “Sigmund Oilfields is a major player in Nigeria’s offshore oil and gas sector…Sigmund is also a trader of crude oil.”
“We are known for unlocking opportunities…” he underscored. In relation to the partnership with IGI it was stated that the companies have been in talks with each other for about two years. It was stated that the companies are eagerly awaiting the finalization of the agreement with government before they can move straight into action.
(Company that won two oil blocks in Guyana happy to pay 10% taxes, 10% royalty)
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