39. Guyana – Orinduik Petroleum Agreement
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, as 2% Royalty, instead of 0 %)
- Royalty is only 1 %, and, in addition…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.
- 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 ?
- YY 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
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