The ‘fiscal terms’ of Guyana’s 2016, Production Sharing Agreement

Introduction: Catalogue The catalogue of desirable features energy economists promote for effective PSAs are that 1) ownership of the petroleum wealth should remain within the domain of the country in which it is discovered; 2) the State/Principal should maintain managerial control of this wealth, but 3) the Contractor/Agent (in Guyana’s case Exxon and its Partners) should maintain operational control of contract-assigned petroleum activities.

How production sharing agreements have had to adapt

  Introduction From their very inception, oil agreements/contracts have embodied dynamic processes between states, as sovereign owners or guarantors/regulators of rights to a country’s petroleum wealth, and individuals/oil-companies that contract to develop this wealth.

Critique of Guyana-type production sharing agreements

Introduction Production sharing agreements or contracts (PSAs), have been, from the time of their earliest introduction to the oil and gas sector, subjected to in-depth critical analyses and/or evaluations from economic, legal, and institutional perspectives.

What Next: More on the Natural Gas Option!

Introduction Last week’s column had raised the conundrum: What next? Given that, I am advising against state investment in oil refining therefore, what other major options I am recommending for realizing the substantial potential of Guyana’s recent petroleum finds.

Queries in support of Decision Rule 2

(No overall economic justification for a Guyana state-owned refinery)

Introduction In last week’s column I sought to recall, for the benefit of readers, several key observations and conclusions that were drawn from my earlier review of refinery economics in order to support Decision Rule 2.

Decision rule for a local oil refinery with no state support

Introduction: Proviso It is worth repeating: my two previous columns had sought to make it abundantly clear that if a local oil refinery is established, which is wholly owned, managed and operationalized, either separately, or through a partnership (or some other joint arrangement), involving only 1) foreign investors (whether private, state, or some combination thereof), or 2) domestic private investors, this would be acceptable in my judgement, subject to one important proviso or caveat.