HGP Nightly News – PNC/R Leader Aubrey Norton is calling for Guyana to negotiate new fiscal arrangements for future oil developments, arguing that the country should secure greater benefits now that the Stabroek Block has been substantially de-risked.
Norton made the case during the party’s weekly press conference, pointing to the increase in Guyana’s effective share of production from 12.5% to 39.8% following the recovery of ExxonMobil’s investments in the seven projects approved to date.
He argued that the circumstances surrounding future developments are different from those that existed when Guyana signed its earlier petroleum agreements, particularly because significant commercial quantities of oil have already been established.
Under the 2016 agreement, the contractor can recover costs using up to 75% of production each month, while Guyana receives a 2% royalty and 50% of profit oil after recoverable expenses are deducted.
With at least two additional developments being pursued, Norton warned that Guyana’s share could again be reduced if new projects continue under the existing arrangements.
He is therefore advocating for new contracts and a ring-fencing mechanism that would prevent revenues from existing developments from being used to finance the costs of separate projects.
“We should develop new modalities and mechanisms to move forward that allow us to benefit significantly,” Norton said, arguing that Guyana should no longer negotiate future developments as though the country faces the same level of exploration risk that existed in the past.
President Irfaan Ali has said the Government will seek expert advice on financing arrangements for future projects.
Norton welcomed the move but said that expert advice should lead to new agreements that provide Guyana with a greater return from its natural resources.
He also warned that increased oil revenues alone will not guarantee that Guyanese benefit, arguing that stronger safeguards against corruption and mismanagement are also necessary.
Norton said his party’s manifesto outlines measures aimed at ensuring greater economic benefits from Guyana’s oil wealth reach citizens.
