1% royalty, 50% profit sharing in Israeli based oil contract with Guyana
The Guyana Government and Israeli-based oil exploratory firm, Ratio Guyana Limited have agreed to a royalty payment of 1% and a 50/50 profit-sharing arrangement after costs are recovered by the contractor.
The information was included in the April 28, 2015, Production Sharing Agreement which was released by the Ministry of Natural Resources today.
The release of this document is in keeping with the Government’s promise to have all petroleum agreements made public. Already, the contracts between the Guyana Government and US-based oil giant ExxonMobil and Canadian-based CGX Energy have been posted on the Ministry’s website.
Ratio Guyana Limited is in a joint venture partnership with Esso Exploration and Production Guyana Limited (EEPGL), a subsidiary of US oil exploration giant ExxonMobil, in the Kaieteur Block, offshore Guyana.
Ratio Guyana Limited has a 25% stake in the Kaieteur Block. Ratio Energy Limited has another 25% of the Kaieteur Block while EEPGL has a stake of 50%.
According to the Natural Resources Ministry, negotiations on the contract began in mid-2012 for a Petroleum Licence within the ultra-deepwater Guyana Basin area.
At the time, that area was known as Annex B. Negotiations were nearly completed when the October 2013 Anadarko/Venezuelan incident occurred. It took until the early part of 2015 before negotiations resumed.
On April 28, 2015, – just before the 2015 General and Regional Elections – the production sharing agreement was signed by both the then Government of Guyana and Ratio’s principals. The concession was then renamed the ‘Kaieteur’ Block and totals approximately 13,535 sq. kms.
The contract can be reviewed here: Ratio-Agreement