‘New PSA boosts Guyana’s oil share while keeping green model intact’ – Pres Ali

The new production sharing agreement (PSA), which lays out the new framework for future oil developments in Guyana, has been finalised, according to President Dr Mohamed Irfaan Ali.

The PSA marks a decisive shift in how Guyana will secure greater value from petroleum resources while advancing an ambitious model of environmentally sustainable growth.

Addressing an international audience at Rice University’s Baker Institute in Houston, USA, on Monday, President Ali explained that while existing agreements will be honoured, all new developments will fall under strengthened fiscal and governance terms.

“We have made it very clear that the sanctity of contract is important for us, but we also said that it would be a new production sharing agreement, and that agreement has been finalised,” the president stated. “There is no second-guessing what we are doing. We are ready to make the hard decisions.”

The new PSA introduces significantly improved returns for Guyana. The ‘cost oil’ has been reduced to 65 per cent, down from the 75 per cent ceiling under the Stabroek Block agreement, increasing the share of profit oil.

In addition, the agreement establishes a 10 per cent corporate tax and 10 per cent royalty, up from zero and two per cent respectively, ensuring higher government revenues from future production.

Companies entering new agreements will also face higher upfront costs, including a US $20 million signing bonus for deepwater concessions and US $10 million for shallow water blocks.

Notably, these new concessions are significantly smaller, specifically nine times smaller than the approximately 26,800 square kilometre Stabroek Block.

Noting that predictability remains central to maintaining investor confidence, President Ali stated, “If investors cannot see predictability in your policy-making and decision-making, then you will find it very difficult.”

He stated that Guyana’s rule-based and transparent framework continues to attract global interest.

Beyond fiscal reforms, President Ali positioned Guyana as a country seeking to redefine the relationship between oil production and environmental stewardship.

“We are not interested in being a sacrificial lamb on the altar of global energy demand,” he said. “We’re interested in being a model…a country that shared the wealth, protected its environment, and built a diversified economy.”

Guyana currently maintains about 85 per cent forest cover and one of the lowest deforestation rates globally, with forests storing an estimated 19.5 gigatonnes of carbon. These assets form the backbone of the Low Carbon Development Strategy (LCDS) 2030, championed by Vice President Dr Bharrat Jagdeo.

“We do not see Guyana as a petro-producing country that adds problems to the world,” the president added. “We see Guyana as utilising this advantage to demonstrate that development powered by energy can coexist with environmental stability.”

Guyana’s leaders have long advocated for market-based mechanisms to monetise ecosystem services, including carbon storage and biodiversity, as part of a broader strategy to diversify the economy and reduce long-term dependence on oil revenues.

Guyana has earned an estimated US $750 million in carbon credits from Hess Corporation, a consortium of ExxonMobil, under the same 2030 low-carbon development project.

Guyana has established a strong partnership with the World Bank’s International Development Association (IDA), signing a Memorandum of Understanding on April 17, 2026, to propel collaboration under the Global Biodiversity Alliance, a key initiative led by President Ali.

The partnership is expected to strengthen international cooperation on conservation, restoration, and sustainable use of biodiversity, while scaling innovative financing mechanisms that reward environmental stewardship.

President Ali maintained that oil and gas will remain a central pillar of Guyana’s economy for decades, supported by competitive production costs and increasing efficiency.