The Vice President of Guyana has informed that the Government is developing a new model Production Sharing Agreement which will include more favourable provisions for Guyanese than previous contracts. The Vice President explained as well that the new model Production Sharing Agreement will seek to strike a balance between the oil company’s legitimate expectation of a good return on their investment, incentives that will accelerate exploration and production and a greater share of benefits for Guyanese.

He described that the Government is exploring and examining petroleum arrangements in different countries and their respective impact to inform the development of the new model Production Sharing Agreement. However, the Vice President also indicated that the government will not
make pronouncements on specific numbers since this has to be negotiated based on all variables in the contract.

On this issue of tax incentives in the new model Production Sharing Agreement, the Vice President explained that the government is open to granting corporate tax exemptions to petroleum operators as they have done this in the past in other industries, such as the bauxite mining industry and in the previous Production Sharing Agreements.

Vice President Dr. Bharrat Jagdeo said the government is currently reworking the Petroleum (Exploration and Production) Act of 1986, to modernize its provisions. Dr. Jagdeo considers that it is likely that by March 2023 the Bill will be passed into law. Prior to the passing of a Bill, lawmakers subject it to debate in the House.

The new model Production Sharing Agreements is expected to be made public before the auction of the oil blocks in Guyana’s offshore basin later this year.