Bharrat ‘hopeful’ gov’t can ink oil contract with Guyanese women-led group before yearend

Minister of Natural Resources, Vickram Bharrat, says negotiations with Sispro Inc. are progressing steadily, and he remains optimistic that a Production Sharing Agreement (PSA) could be finalised before the end of this year.

Block S3 and block D2 were awarded to Sispro, a company headed by four Guyanese businesswomen, during the 2023 oil blocks auction. The company is now working to finalise its operating arrangements to meet the government’s requirements.

“Sispro, we would have mentioned over and over, is a company we want to work with so that is why I am even more hopeful they can reach a position with an operator and we can sign as soon as possible, if possible this year we will be even more excited to do that,” Bharrat told reporters at the sideline of the PSA signing with Ghanaian oil company Cybele Energy for shallow-water Block S7.

Responding to questions about delays in finalising the agreement, Minister Bharrat explained that Sispro must secure a qualified operator with the necessary technical and financial capabilities.

“They obviously need an operator with the kind of credentials and the balance sheet as well to execute the work programme because we are not going to sign an agreement with companies that cannot or accept an operator that cannot execute the work programme.”

On Tuesday, Cybele Energy became the second company to sign a PSA with the government. The deal came with a US$17 million signing bonus. Per Guyana’s new oil management regime, the minimum signing bonus for shallow blocks is US$10 million.

Last month, a consortium of TotalEnergies, QatarEnergy, and PETRONAS signed the first PSA under the new fiscal regime for Block S4. The updated model, introduced in the 2022 licensing round, raises the royalty from 2 percent to 10 percent, caps cost recovery at 65 percent, and adds a 10 percent corporate tax, while maintaining a 50/50 profit-oil split after cost recovery.