Guyana’s contract with oil major ExxonMobil is a good one but some of the provisions are “shady” and the signing bonus and royalty were too low, says Dr Tulsi Dyal Singh, a Midland, Texas-based small oil and gas investor who has been involved in various aspects of the industry.
Singh, on Friday, hosted a talk called ‘Get Ready Guyana: You Are An Oil Man’ at Moray House. The talk was based on an article he wrote for the Guyana Annual 2019. Singh, who has been a resident of Midland – which sits over the oil-rich Permian Basin – for over 40 years, has had first-hand experiences of the ‘booms and busts’ of the oil industry.
ExxonMobil has discovered over five billion barrels of oil offshore Guyana and is moving to begin production early next year. However, the 2016 Production Sharing Agreement (PSA) with the Government of Guyana has come under withering criticism since it was released at the end of 2017. It contained a 2 per cent royalty figure for Guyana on every barrel of oil which experts said should have been far higher since the deal was concluded after ExxonMobil’s major oil find in its 6.6 million acres Stabroek Block. It also catered for a US$18 million signing bonus which experts said should have been higher and which the government had not publicly disclosed until it came under pressure to release the PSA.
