With ExxonMobil having found 12 operable wells in the offshore Stabroek Block, the Guyana government is concerned that the absence of a ring-fencing arrangement could negatively affect revenue earned from its explorations.
According to the Concluding Statement of the 2019 International Monetary Fund (IMF) Article IV Mission issued yesterday “authorities have indicated their concerns that the absence of a ring-fencing arrangement in the Stabroek Production Sharing Agreement (PSA) could potentially affect the projected flow of government oil revenues.”
The absence of a ring-fencing arrangement in the 2016 PSA has for years been discussed as a possible liability of Guyana’s developing oil sector. Such an arrangement would’ve put “a limitation on consolidation of income and deductions for tax purposes across different activities or different projects undertaken by the same taxpayer.”
