39. Guyana – Orinduik Petroleum Agreement – Canje and Kaieteur Block PSC
Inserted April 2019:
How much money could (would) Guyana get from its Orinduik Profit Share ? Based on 2.9 billion BOE (Gross P50) reserves.
From “Rags to Riches”, “a nation that did not expect to win the lotto”, “soon to be the richest corner of South America”.
- Petroleum Agreement signed 14th Jan. 2016
- One year after Liza giant discovery, May 2015
- And 5 months before 27th June, 2016:
- When ExxonMobil’s original contract (June 14, 1999) was re-negotiated (though, just few items, such as 2% Royalty instead of 0 %)
- Royalty is only 1 %, and, in addition…is included in the profit share of the Government (Article 15.6):
- wowww…how beautifully negotiated and also obtained…by the IOC…Two-in-one, for one price. What a bargain.
- Monthly Profit Oil Share, with increasing production from 50% – up to 60 % (Article 11.4)
- 2.9 billion BOE (Gross P50) reserves
- This Contract is ” similar ” in many aspects to the ExxonMobil contract.
- The royalty is even lower (1% vs. 2%).
- Company Total exercises option to acquire 25% Working Interest in the Orinduik Block, offshore Guyana, from Eco Atlantic (Guyana) Inc. (13 September 2018).
- WI’s in the Orinduik License will now be as follows:
- Tullow 60% (Operator); Total 25%; Eco Guyana 15%
- Question ?
- Did Guyana seize this opportunity to negotiate a better, upgraded, ” proven basin ” profit share formula ?
- (inserted: Guyana accepted Total’s farm-in end october 2018. Did they upgrade their profit share to proven basin level ???).
- Covering at least the intended Total 25% WI farm-in portion.
- That still has to be officially accepted and approved by Guyana ?
- FYI, my opinion:
- Orinduik PA presents similar crucial pitfalls, loopholes and omissions as the ExxonMobil PA.
- Analyzed and indicated in various of my blogs and on Linkedin
- How much money could (would) Guyana get from its Orinduik Profit Share ?
- Based on published Gross P50 reserve numbers
- Make your own fiscal – economic runs
- If adapted, upgraded to ” Proven Basin PA Clauses “.
- Thus, increased profit share formula and royalty (e.g. 6 %)?
- How many billions US$ extra in entitlement and profit share ?
- With 2.9 billion BOE:
- 1% Royalty = X bbls/US$
- 6% Royalty = 6X bbls/US$
- How many billion US$ does this represent ?
- XX or YYY billion US$
- Just calculate yourself.
- How many (2 digits? 3 digits??) billions US$ you have won / lost….with this deal…
- Faîtes vos jeux
- These are solely my own personal musings
- To Whom may be interested
- To Whom it might be of fair and constructive use
- As an independent petroleum advisor.
- Also see 9 Guyana contracts on https://www.resourcecontracts.org/search?q=&country%5B%5D=GYr
Official start of the “ Oil Curse in Guyana “:
March 04, 2015 ??
Guyana: Oil Blocks awarded to four companies with no financial wherewithal (6/19):
Day before the 2015 General and Regional Elections, former President, Donald Ramotar acted in a manner that was contrary to this international best practice.
Ramotar signed away the Canje and Kaieteur Blocks, which total over 4.8 million acres, to four companies which have no track record of exploring for oil prior to 2015.
CANJE BLOCK OPERATORS
The two companies, which President Ramotar signed away the Canje Block to are Mid-Atlantic Oil and Gas and JHI Associates Inc. The block was awarded to the companies on March 4, 2015. This was roughly two months before the May 11, 2015 elections were held.
“The point remains that the companies, JHI and Mid-Atlantic, do not have a track record for exploration anywhere in the world since its incorporation,” the officials added.
THE KAIETEUR BLOCK
President Ramotar awarded the Kaieteur Block to Ratio Energy Limited and Ratio Guyana on April 28, 2015. Both companies are registered at the same offices in Prashad Nagar and Gibraltar, Israel.
Ratio Guyana does not have a website but on the Kaieteur Block’s Production Sharing Agreement (PSA), a Ryan Pereira is signed on as the Company Secretary, Director and General Partner of the company. This company’s only asset remains the Kaieteur Block. Not a single trace of evidence can be found to prove that it has years of experience in the exploration of oil and gas. (SEE LINK FOR PSA : https://resourcecontracts.org/contract/ocds-591adf-2701587320/view#/pdf)
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