…1% royalty to be paid by government

THE Production Sharing Agreement (PSA) between the Government of the Cooperative Republic of Guyana and Ratio Guyana Limited has cost-oil percentage of 75 percent and the 25 percent balance profit-oil split 50/50 for government and contractor. Further, a royalty of 1 percent payable by the government’s take of the profits is specified in the Ratio Guyana Limited contract.

The Ratio Guyana Limited PSA is the third to be released since December 2017, the others being ExxonMobil and CGX Resources Inc. It is envisaged that the Ministry of Natural Resources will release at least two petroleum agreements monthly, fulfilling a commitment made by the administration to release all petroleum agreements and eventually all agreements in the natural resources sectors.

The Ratio Guyana Limited agreement was signed on April 28, 2015 by then President Donald Ramotar and the President of Ratio Energy Limited, the parent company of Ratio Guyana Limited. Ratio Guyana Limited, whose parent company is Israel-based, is a joint-venture partner of ExxonMobil subsidiary Esso Exploration and Production Guyana Limited (EEPGL) in Guyana’s offshore Kaieteur Block. EEPGL has the majority stake at 50 percent, while Ratio Guyana Limited and its parent company Ratio Energy Limited each have a 25 percent stake.

The Ministry of Natural Resources said in a release on Wednesday that Ratio Energy Limited. (nowCataleya Energy Limited by way of a duly registered change of name) and Ratio Guyana Limited commenced negotiations with the previous Government of Guyana for a Petroleum Licence within the ultra-deep water Guyana Basin area in mid-2012.

“At the time, that area was known as Annex B.  Negotiations were nearly completed when the October 2013 Anadarko/Venezuelan incident occurred.  It took until the first quarter of 2015 before negotiations resumed.  On April 28, 2015, the production- sharing agreement was signed by both the then Government of Guyana and Ratio’s principals. The concession was then renamed the ‘Kaieteur’ Block, and totals approximately 13,535 sq. kms,” said the ministry in the press release.