Production Licence for Payara signed, not Production Sharing Agreement

-Vice President Jagdeo

Vice President, Hon. Dr. Bharrat Jagdeo on Friday afternoon criticised Leader of the Opposition, Hon. Joseph Harmon for peddling misinformation about the recent oil signing.  

Earlier today, Mr. Harmon said the Petroleum Production Licence (PPL) approved this week by the PPP/C Government was similar to the Production Sharing Agreement (PSA) issued under the APNU+AFC administration.

However, Dr. Jagdeo noted that a PSA differs from a production licence. He highlighted that the PSA was already signed and the Government has to operate within the confines of that agreement once it issues licences for the Stabroek Block. 

“This is the height of trickery. Every school child knows that we were not negotiating the production agreement, the Stabroek Block Agreement that was signed by Raphael Trotman overnight …,” he said, explaining that the PSA governs all the licences which will be issued in the Block.

“The agreement deals with all the fiscal terms that will govern every development which has to be licensed separately in the Stabroek Block area.”

The Vice-President also outlined that the review of the Payara licence was never intended to be a renegotiation of the PSA but rather an effort to get more out of the poor deal signed on to by the APNU+AFC.

He dismissed calls for the renegotiation of the Stabroek Block PSA as “wishful thinking,” but noted that the PSAs for future development of the Canje and Kaieteur Blocks “will be very dissimilar” to the Stabroek Block PSA.

“The conditions of those agreements will be established when we work out what a model production agreement for the future will be,” he said.

The Government on Wednesday signed a Petroleum Production Licence with Esso Exploration and Production Guyana Limited (an ExxonMobil subsidiary), CNOOC Petroleum Guyana Limited, and Hess Guyana Exploration Limited for prospecting and production operations in the Payara oil field. The investors were also issued an environmental permit by the Environmental Protection Agency.

Production is set to start in 2024.

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