Stabroek’s Fiscal Terms On Par With Other frontiers

(DPI, 31.Jul.2020) — Oil and gas industry analyst Wood Mackenzie in its recent report stated that compared to other countries with similar circumstances, Guyana’s Stabroek Block fiscal terms ranks well.

The website OilNOW reported that the company had benched marked the Stabroek Production Sharing Agreement (PSA) against countries with similar characteristics. This showed that Guyana’s terms are in the middle of the range.

“From a total of 10 countries studied (Argentina, Barbados, Colombia, Guyana, Ireland, Jamaica, Mauritania, Somalia, South Africa, Suriname) Guyana lies midway in terms of price resilience based on fiscal benchmarking of the Stabroek block at $40 per barrel total value post-tax. The UK-based consultancy group pointed out that while many other projects are now “out of the money”, the Stabroek block remains viable at oil prices below $40 per barrel” OilNOW said.

The article quoted Wood Mackenzie’s Consulting Director, Juan Agudelo who noted that “Guyana’s terms are in the middle of the selected range of countries with fifty-seven percent. This is for a prospect of 200 million barrels and at a Brent price of forty dollars per barrel on real terms. In other words, at forty dollars oil price, the stature of Guyana is fifty-seven percent.”

Agudelo added that the fiscal terms allow for a payout of eight years which is in line with the average period when compared to other countries.

“You see a range – South Africa being the fastest of all the countries with 7.7 years and the longest being Columbia with almost nine years. The faster the recovery the more attractive the fiscal terms are to investors,” he stated.

Just recently, the Inter-American Development Bank had reported that despite the current circumstances as a result of the global pandemic, the political situation and fall in oil prices, Guyana’s petroleum industry remains bright.

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By Anara Khan