As interest in exploring unallocated petroleum blocks off Guyana’s shores increases, Government is seeking to revise the existing template of the Production Sharing Agreement (PSA) so as to “safeguard the rights of our nation to a fair share of resource wealth.”
This is according to Minister of Finance Winston Jordan who told the National Assembly, during the presentation of Budget 2018, that the new PSA template will be more accommodating to changing commodity prices while maintaining a level of progressivity that is responsive to profitability.
This development comes on the heels of three additional oil discoveries in the Stabroek block during 2017. These discoveries are Payara, Snoek, and Turbot. While the quantity and quality of the latter two discoveries are still being assessed, the gross recoverable resources for the Stabroek bloc is now estimated to be between 2.25 – 2.75 billion oil-equivalent barrels, making it one of the most significant global finds in recent years.
“These discoveries have de-risked the basin, which is estimated to contain at least 7 billion oil-equivalent barrels, and has resulted in the significant ramping up of exploration activities in other already-allocated off-shore blocs,” Jordan noted.
He explained that while Guyana strengthens its ability to negotiate more equitable PSAs, key Government agencies within the recently established Inter-Ministerial Technical Committee on petroleum will continue to coordinate capacity building and interactions with the industry.
“The committee‘s agenda in the immediate future will focus on coordinating capacity building, information sharing, as well as providing input into the development of a legal and institutional framework to support the sovereign wealth fund (SWF),” he explained.
It was further noted that the development of a rules-based SWF is critical to ensuring that resource revenues are responsibly managed within a transparent framework that promotes the highest levels of accountability. The SWF will not just serve for investment, but also to save for future generations and to stabilise the economy in times of global economic instability.
Government has committed to publishing during 2018 a green paper to apprise the National Assembly on the proposal for the SWF, seek feedback for further refinement, and stimulate a national discussion to ensure that all citizens understand the benefits to be had and the perils to guard against in the collection and management of Guyana’s oil resources.