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Govt. to sign contract with Ghanaian company for shallow-water block
(Kaieteur News) – The government is scheduled to sign a Production Sharing Agreement (PSA) with Ghanaian company Cybele Energy Limited, for the shallow water block—S7 offshore Guyana, on Tuesday, December 9.
The announcement was made on Friday by Minister of Natural Resources Vickram Bharrat during the launch of the fifth annual Guyana Energy Conference and Supply Chain Expo.
“We are going to sign another production agreement with one of the other companies that would have been awarded a shallow-block during the last bid round,” Minister Bharrat said.
Guyana’s maiden auction launched in December 2022 featured 14 blocks but only eight received bids. So far, only one PSA has been signed, that is with energy giant Total Energies and its partners Qatar Energy and Petronas for has Block S4, a shallow-water concession off the country’s coast.
In 2023, government awarded the following blocks S5 and S10 to International Group Investment Inc. out of Nigeria; Delcorp Incorporated, a Guyanese company, in collaboration with Watad Energy and Communications Ltd and Arabian Drilling Company for a deepwater block titled D1; a consortium led by Guyanese women, Sispro Inc., were awarded a shallow water block called S3 and a deepwater block titled D2; ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited were approved for shallow water block S8 and Cybele Energy Limited for the block S7.
“Cybele has really advanced the negotiation with us to a stage where we would have finalised the agreement with them…they will be bringing a partner from one of the major operators from Nigeria (Liberty Petroleum Corporation) as their operator,” the minister stated.
He noted that most of the shallow-water blocks that were auctioned average 2,000 square kilometers. The fiscal regime of the new PSA requires the payment of a 10 per cent royalty and a 10 percent corporate tax. The cost recovery ceiling will be capped at 65 per cent in a given year, while profits will be shared 50/50 between companies and the state.
Minister Bharrat noted that the PSA that will be signed with Cybele is the same PSA that was signed with the Total Energies consortium. “…remember the delay that we had in signing these agreements is because we wanted one PSA for all the companies that are signing for blocks in the shallow water, so we have a shallow water PSA, and not different PSA for different companies so that took some time to get all of the companies to agree to the conditions in one PSA,” he noted. The PSA is currently published on the Ministry of Natural Resources website.
Moreover, the minister noted, “So the Guyana basin, our country has been attracting some of the major oil companies in the world which we are very happy of,” he added. He also disclosed that government is still in talks with ExxonMobil.
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