Guyana will get less than one-third of the what ExxonMobil's Liza 1 oil project will generate – Ramson
By Kaieter News
Petroleumworld 04 30 2018
Guyana will secure less than a third of the revenue to be generated from the Liza Phase one project. This was pointed out by Attorney at Law and Oil and Gas Consultant, Charles Ramson.
Ramson said that this should not have been the case because the APNU+AFC government had an opportunity—after oil was discovered in commercial quantities—to alter the ExxonMobil contract. He said that Guyana should have been receiving way more based on its proven oil reserves.
“Our government should have ensured that we developed a physical regime that would have allowed us to secure more than that which we are expected to collect.”
Ramson noted that ExxonMobil is expected to produce no less than 450 million barrels of oil in Liza Phase one. At the International Monetary Fund's (IMF) projected figure of US$50 per barrel, the Liza project will generate US$22.5B. Of this sum, Ramson pointed out that Guyana will only get US$7B.
The consultant said that Guyana's revenue from royalty will be US$450M. But that is over a period of about 20 to 22 years. Ramson calculated the average royalty per year at US$22.5M
He said that contrary to what the politicians have been saying, Guyana will not secure over US$300M in 2020. Ramson said that a more accurate figure is US$213M. This is based on the model provided by ExxonMobil on its Facebook page. (See link for further details)
Ramson said that Guyana will have to wait until 2021 to receive a projected US$320M.
The Oil and Gas Consultant asserted that that trend will continue in a very similar pattern for the next two years when cost is still high.
He said that coming close to end of the project cycle, Guyana is projected to receive around US$125M per year.
Ramson quoted Open Oil which said that there is a significant possibility, as reserves growth gathers pace, that Exxon and its partners could achieve “super profits”, rates of return of over 25% and edging considerably higher under certain conditions.
Open Oil also said that Guyana ranked the lowest of eight frontier counties when the fiscal regimes were compared.
Further, Ramson pointed to the IMF that said that the “Stabroek PSA has the lowest Average Effective Tax Rate (AETR) of all the fiscal regimes evaluated.
This result confirms that the terms offered in the agreement are generous to the investor, but were probably required to attract investment at a time when little was known about the geological prospects of the country.”
Hit your target - Advertise with Us
Story from Kaieter News
Kaieteurnewsonline.com 04 29 2018
We invite all our readers to share with us
their views and comments about this article.
Write to firstname.lastname@example.org
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: email@example.com
Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels