–Dr. Jagdeo says ExxonMobil will have to ‘live with’ those conditions outlined in the draft PSA
Though the government continues to work towards a final Production Sharing Agreement (PSA), Vice President, Dr. Bharrat Jagdeo, has reaffirmed that there will be no changes to the fiscal terms from what was released in a draft PSA earlier this year.

Last week, President of ExxonMobil Guyana, Alistair Routledge, expressed disapproval of the fiscal terms contained in the draft PSA, which was released in March. However, the Vice President established that the government remains unshaken by the reaction.
“We’re not changing the fiscal terms. That’s it, we’re not changing the fiscal terms. So, they would have to live with those terms,” Dr. Jagdeo maintained, when he was questioned on the issue during his weekly press conference last Thursday.

The draft model petroleum agreement outlines an oil agreement with significantly more benefits for Guyana, including a royalty rate increased from two per cent to 10 per cent, corporate tax of 10 per cent and a cap on cost oil of 65 per cent.
The new fiscal terms will govern future oil contracts that the government inks with petroleum operators, however, it does not affect an existing PSA that the government has with ExxonMobil.
ExxonMobil, and partners Hess and CNOOC, currently operate offshore Guyana in the prolific Stabroek Block, where transactions are governed under a widely disparaged 2016 PSA that was orchestrated by the A Partnership for National Unity+Alliance For Change (APNU+AFC) coalition when it was in government.

In the 2016 PSA fiscal terms, the royalty was a mere two per cent, while recoverable cost oil was 75 per cent. Since a change in administration in 2020, the People’s Progressive Party Civic (PPP/C) has been working to maximise benefits from the lopsided 2016 agreement and provide better terms in future agreements.
The government is currently auctioning off 14 offshore oil blocks, including three deepwater and 11 shallow water blocks. Guyana is among 65 countries that launched auctions of oil blocks at the same time, and as such the government worked along with international consultant, IHS Markit Consulting, to offer the best terms that will see the country remaining competitive while also getting a fair deal.
Since its release the draft PSA has been undergoing extensive consultation, and seeing feedback from stakeholders in all sectors.