Guyana Boosts Gov't Royalties for Future Oil Licenses

July 3, 2019

© Mark Rubens / Adobe Stock
© Mark Rubens / Adobe Stock

Guyana is preparing to raise the take of the government in future oil licences, the director of the South American country's Department of Energy said on Wednesday.

U.S. energy giant Exxon, French group Total and Britain's Tullow Oil are drilling wells offshore Guyana, where Exxon has discovered over 4 billion barrels of oil, a major global find.

"Royalties will all have to be examined. We expect them to be higher than they currently are," Mark Bynoe told Reuters on the sidelines of an industry conference in London.

Guyana is preparing a licensing round for acreage in both shallow and deep water for the third quarter of 2020. Those licenses would fall under the new regime, he said.

"Currently, our position is that it wouldn’t affect existing contracts," Bynoe said.

Last month, Clive Thomas, the director of Guyana’s State Assets Recovery Agency (SARA), which was set up in 2015 and has a mandate to pursue corruption, said a probe was ongoing into how previous licenses were awarded.

"We are investigating, particularly the Kaieteur and the Canje (blocks), but in fairness to everybody - all the parties to the issue, we have to investigate all," Thomas said.

Bynoe declined to comment when asked about the scope and possible repercussions of the SARA probe, adding SARA was an independent body.

Eco has said they are not aware of any probe that could affect its work in Guyana, Tullow has said it was not concerned and Hess - partnering with Exxon in Guyana - has said authorities had assured it that contracts would be respected.


(Reporting by Shadia Nasralla, additional reporting by Neil Marks and Gary McWilliams, Editing by Louise Heavens)



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