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Four companies to sign contracts for new oil blocks next month
Minister of Natural Resources, Vickram Bharrat
Kaieteur News – Sispro Inc., the stand-alone Guyanese company that participated in the country’s inaugural oil block auction launched in 2022, will be among four companies set to sign contracts in October with the Government of Guyana.
This was disclosed by Minister of Natural Resources, Vickram Bharrat, during a recently aired interview on Starting Point, Oil and Gas Edition.
Minister Bharrat acknowledged that finalising the Production Sharing Agreements (PSAs) for the auction took some time, explaining that government was tasked with updating and creating a new model PSA with improved terms when compared to the PSA governing ExxonMobil Guyana Limited’s (EMGL) Stabroek Block operations.
He said negotiations with the companies also added to the delays. “It took a while, too, because it goes back and forth. Most of these companies are not in Guyana, so most of the time is virtual. Most time it is based on their availability,” he stated.
The women behind Sispro Inc., (from left) Ayodele Dalgety-Dean, Abbigale Loncke-Watson, Dr. Melissa Varswyck, and Dee George
According to the Minister, Government could have proceeded with contracts for some companies earlier, but instead chose a uniform approach. Bharrat said, “We didn’t want a PSA for X company, a PSA for Y company, a PSA for R company. We wanted a PSA that will be signed by all companies. That is industry standard, and that is world class, and that will bring better benefits to Guyanese in comparison to the 2016 Stabroek Block PSA. So that took some time.”
In December 2022, President Irfaan Ali launched the country’s inaugural bid round for 14 offshore oil blocks. When bids were opened, it was revealed that six companies had submitted proposals for eight blocks. Government in 2023 awarded eight blocks to Sispro Inc.; TotalEnergies, in consortium with Qatar Energy and Petronas; Liberty Petroleum Corporation; Cybele Energy Limited; International Group Investment Inc.; ExxonMobil Guyana Limited, Hess and CNOOC; and Delcorp Inc., comprising Watad Energy and Communications Limited and Arabian Drilling Company.
In 2024, four companies accepted the terms of the new PSA. Minister Bharrat said that with negotiations completed, government is now moving to formalise the agreements. “We have already made contact with those companies. They know themselves by now, so we’re looking to sign that agreement in October with those four companies,” he noted.
He confirmed that Sispro is among them, adding, “I’m very proud that it’s a Guyanese company, especially our women folk getting involved in the oil and gas sector. It shows that we’re expanding the way we think, and taking risk and want to be involved in the oil and gas sector.”
Sispro Inc. was awarded a shallow water block, S3, and a deep-water block, D2. Minister Bharrat noted that the PSA to be signed with Sispro will cover the shallow water block. He added, “Then at some point in the future, once we conclude the negotiation, deep-water one, we will move forward with that.” Notably, the fiscal regime of the new PSA requires the payment of a 10 per cent royalty and a 10 per cent corporate tax. The cost recovery ceiling will be capped at 65 percent in a given year, while profits will be shared 50/50 between companies and the state.
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- Auction, ExxonMobil Guyana, Guyana Oil, Oil and Gas, oil block, Production Sharing Agreements, Sispro Inc., Stabroek Block, Vickram Bharrat, Women in oil
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