Minister of Natural Resources, Vickram Bharrat, said the Government is anxious to sign off on a Production Sharing Agreement with Guyanese owned company – Sispro Inc – for at least one of the two oil blocks it was awarded. However, he said the company must lock in an operator that would be able to execute the rigid work programme under the new model PSA.

Sispro – a woman led company was among six companies and consortia that were awarded oil blocks offshore Guyana in October 2023 based on the 2022 Licensing Round.

It was awarded both a Shallow Water Block and a Deep Water Block. However, the company has found it difficult to lock in an operator with the technical capabilities and resources to execute the work programme based on the new model PSA.

“Obviously, they need an operator – 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 a work programme,” the Natural Resources Minister told reporters recently.

The model PSA imposes a stiff penalty for companies that fail to complete their work programme in accordance with the stipulated timeline. Added to that, based on the PSA, companies are required to pay a minimum signature bonus of no less than US$10 Million for shallow water and US$20 Million for deepwater blocks.

But notwithstanding the challenges confronting the company, Minister Bharrat said he is hopeful that the company would be able to able to sign the PSA with the Government before the end of the year but if not, early next year.

“The team is speaking with Sispro. The team is in negotiation with Sispro. So, I am still hopeful, I am always hopeful, you know me, I am always positive, and I am always hopeful, and Sispro, as we would have mentioned over and over, is a company that we want to work with, and that is why I am even more hopeful that they could reach a position with their operator and that we can sign as soon as possible,” he said.

Already, the Government has signed Production Sharing Agreements with an international consortium comprising three companies – Total Energies, QatarEnergy and PETRONAS; and Ghanaian-based company Cybele Energy for two Shallow Blocks.

The Total Energies led consortium has based a signing bonus of US$15 Million while Cybele Energy has paid a US $17M signature bonus.

International Group Investment and Montego Energy; ExxonMobil, Hess and CNOOC; and Delcorp Inc, Watad Energy and Arabian Drillers remain in negotiations with the Government for the offshore blocks awarded in 2023. (Svetlana Marshall)

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