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Three oil deals to be signed in first half of 2025 with successful bidders in inaugural bid round- Gov’t
One year, four months later…
Kaieteur News- Guyana is likely to enter three new Production Sharing Agreements (PSAs) in the first half of this year, with successful bidders in the country’s inaugural oil blocks auction.
This was revealed by Finance Minister, Dr. Ashni Singh on Friday, during his 2025 Budget presentation in the National Assembly.
The announcement comes more than one year, four months after bids were opened at the National Procurement and Tender Administration Board (NPTAB) for 14 of Guyana’s offshore oil blocks.
Bids were opened on September 10, 2023 where it was disclosed that six companies submitted bids for eight of the blocks.
Three oil deals
To this end, Dr. Singh said, “Delivering on our commitment of ensuring all oil blocks are competitively tendered and aligned with global best practices, Guyana held its first licensing round in 2023. Among the eight shortlisted blocks, three PSAs will be finalised and signed in the first half of 2025, while the remaining bidders are engaging Government with finalisation also expected this year.”
During the Ministry of Natural Resources end-of-year press conference on January 14, Permanent Secretary, Joslyn McKenzie explained that companies which indicated acceptance of the PSA have been asked to make the final submission of documents, including financial statements as well as legal and regulatory documents.
He said that the Ministry was in the final stages of the review. McKenzie also pointed out that there were a number of consortiums, as such reviews will be conducted for each of the parties.
According to him, “There is no challenge with those companies relative to the submissions made.”
The government has since passed the Petroleum Activities Law and has finalized the new Model Production Sharing Agreements that will govern future awards of deepwater and shallow water concessions.
Kaieteur News had reported that eleven of the oil blocks on auction are located in the shallow area and three are in the deepwater zone. Importantly, each area is governed by separate PSAs. They range between 1000 square kilometres to 3000 square kilometres with the majority of them being close to 2000 square kilometres.
The oil companies will be expected to pay a 10 percent royalty and a 10 percent corporate tax to the government of Guyana. In the meantime, the cost recovery will be capped at 65 percent in a given year, while profits will be shared 50/50 between the parties.
(Three oil deals to be signed in first half of 2025 with successful bidders in inaugural bid round- Gov’t)
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