1% Royalty, 53% profit sharing in CGX agreement

The Government on Saturday released a contract signed on February 12, 2013 with Canadian-based company CGX Resources Inc. (CGX Energy) – fulfilling a promise made to have all petroleum agreements released on the Natural Resources Ministry and the Department of Public Information’s website.

The agreement with CGX energy stipulates a 53%:47% profit sharing.

Under the ‘Cost Recovery and Production Sharing’ heading of the contract, it was found that the Government of Guyana will receive a 53% profit after recoverable contract costs have been satisfied for either crude oil and natural gas and the contractor will receive a 47% profit, “or as otherwise negotiated.”

“…the Profit Oil and/or Profit Gas shall be shared between the Government and Contractor on a monthly basis according to their respective entitlements…” the agreement states.

The Government’s share of Profit Oil includes Royalty payable by CGX at the rate of one percent of Crude oil produced and sold.

The Petroleum agreement between the Government and ESSO Exploration and Production Guyana Limited, CNOOC NEXEN Petroleum Guyana Limited, Hess Guyana Exploration Limited, provides for a 50% profit sharing and a 2% royalty.

CGX currently holds an interest in three Petroleum Agreements (the Corentyne, Berbice and Demerara Blocks) covering approximately 3.3 million gross acres offshore and onshore Guyana.

Click here to access full agreement between the Government of Guyana and CGX Energy.

The Ministry of Natural Resources said in the coming weeks and months, all aspects of remaining agreements will be released in a similar fashion.