Latest update March 27th, 2026 12:40 AM
Guyana to pay for oil spill insurance for Total Energies, losses above coverage
Kaieteur News – The new Production Sharing Agreement (PSA) often flaunted by the government of Guyana for its improved fiscal terms features dangerous clauses that can significantly reduce the additional revenue being sought by the country.
Minister of Natural Resources Vickram Bharrat with representatives of Total Energies, Qatar Energy and Petronas
One such provision imbedded in the deal requires Guyana to pay for oil spill insurance for the Total Energies-led consortium that was recently awarded an offshore shallow water block. Not only that, but Guyana has also agreed to pay for damages not covered by the insurance.
The Petroleum Agreement and Exploration License was published by government this week, mere days after the deal was signed with the oil companies, Total Energies, Qatar Energy and Petronas.
According to Section Three of the PSA, insurance costs and losses can be recovered by the contractor without the approval of the Minister responsible for petroleum. The Agreement states, “Insurance premium and cost incurred for insurance pursuant to Article 29 of this Agreement provided that if such insurance is wholly or partly placed with an Affiliated Company of the Parties comprising the Contractor, such premium and costs shall be recoverable only to the extent generally charged by competitive insurance companies other than an Affiliated Company of a Party comprising the Contractor.”
The contract goes on to note that losses not covered by the insurance can also be recovered, meaning that in such an instance Guyana will be paying for damages relating to an oil spill.
According to the PSA, “Costs, losses and damages incurred to the extent not made good by an insurance claim(s), may be recoverable subject to the Minister’s review and the initial verification and audit process of Article 41 of the Agreement and this Accounting Procedure, including costs, losses or damages resulting from the indemnities in Article 29 of the Agreement incurred to the extent not made good by an insurance claim(s), unless such costs, losses or damages have resulted solely from willful misconduct or gross negligence of the Contractor.”
Total Energies has been awarded block S4, located in shallow water, offshore Guyana. The French company leads the consortium with a 40% interest in the block, along with its partners, Qatar Energy and Petronas with 35% and 25% respectively. Block S4 spans an area of approximately 1,788 square kilometres, located 50 to 100 kilometres off Guyana’s coast in water depths ranging between 30 and 100 metres.
Following its exploration activities in the block, the group will move to production activities if oil is discovered in commercial quantities.
The agreement is the first to be signed since government introduced a revised PSA with greater fiscal benefits to the country. Amid the package is 10% royalty, 10% taxes and cost recovery capped at 65% monthly with profits to be split 50/50.
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In other words the French continue to rob us following the guiding light Amazon Caribbean