Govt propels oil and gas operations for Tullow Oil with tax waiver
– Affirmation of Petroleum Exploration Order 2019 passed
– Tullow Oil will be expanding exploration for 2019-2020
– drilling of two wells will start later this year
DPI, Guyana, Wednesday, May 15, 2019
The National Assembly today approved the passage of the Bill of the Affirmation of the Petroleum Exploration Order of 2019 for the tax waiver for Tullow Oil Guyana.
During the 114th Sitting of the National Assembly of the 11th Parliament of Guyana, Minister of Finance, Winston Jordan read and proposed the passage of the Affirmation of the Petroleum Exploration Order 2019.
Minister Jordan asked that the order be passed, which is in accordance with Section 51 of the Petroleum [Exploration and Production] Act 1986, which allows for the waiver of the application of specific laws, in favour of licensees, with whom the government has entered into production sharing agreements.
“Section 51 of the Act prescribes Finance Minister, by order formative resolution of the National Assembly, direct that any or all of the written laws mentioned in subsection two shall not apply to, or in relation to a licensee,” Minister Jordan explained.
In 2017, Minister Jordan said Tullow Oil successfully and safely started their exploration this time in the Orinduik Block and is expected to be expanding its exploration, drilling two wells in 2019.
Tullow Oil recently related that in keeping with its overarching Local Content Policy, the company will utilise the skills and services of Guyanese, once the exploration is successful. According to the Petroleum Contract, which was signed on January 14, 2016, once the recoverable costs have been satisfied, the profit will be shared between the Government of Guyana and Tullow Oil for each field.
This could see Guyana receiving a profit share as high as 60 per cent and as low as 50 per cent. It should be noted also that for the first 25,000 barrels of oil, Guyana will receive a profit of 50 per cent.
After which, from the next 25,000 barrels, the country’s profit would increase to 52.5 per cent and 55 per cent for the next 15,000 barrels. There is also, provision for the country to receive a one per cent royalty.
Rebecca Ganesh.
Images: Department of Public Information.