Draft Petroleum Bill to be released next week; Gov’t inches closer to finalising new oil contracts 

The draft of Guyana’s new Petroleum Bill will be released next Monday, allowing for a period of public consultations, Vice President Dr. Bharrat Jagdeo said on Thursday.

“By Monday, the draft Petroleum Bill will be put out for public consultations.

“Yesterday (Wednesday), I met with the minister and his staff and we are hoping for Monday next for draft the Petroleum Bill to be released for reviews,” the Vice President told a news conference.

A 1986 Petroleum Act is among the pieces of legislation governing Guyana’s nascent oil and gas sector but many have complained that the law is outdated.

Last year, Dr. Jagdeo said the law would be amended by March 2023.

The government is stepping up efforts meant to overhaul the 1986 Petroleum Act and other key regulations to ensure that new investments in the burgeoning sector are governed by a comprehensive framework of international best practices.”

The announcement of impending legislative changes is also happening while the government is finalizing new oil contracts, deemed model Petroleum Agreements (PSAs).

“The PSAs, we have two models for deep water and shallow water and those we have already in cooperated the comments.

“So, it’s just for another policy review and that will finalize it,” Jagdeo said Thursday.

Those new contracts will be inked between the government and the countries or companies that successfully bid for the 14 oil blocks.

The oil blocks on auction are for shallow and deep-water areas and Jagdeo said there are separate PSAs for both.

The government has received a number of responses from oil companies to draft model PSA and Jagdeo said previously that although there has been some push back to the fiscal terms, the government will not alter them.

A 10% royalty rate heads the new model agreement, an increase from the 2% granted to ExxonMobil for its ongoing exploration and production in the Stabroek Block.

The 75% cost recovery ceiling has been lowered to 65%. The sharing of profits after cost recovery will remain 50/50 between the government and the contractor. Additionally, a corporate tax of 10% will be instituted, where there was none before.