Govt. not keen on ring-fencing 8th project if approved

(Kaieteur News) – Although approval of another oil project could see Guyana’s share of profits fall from the current 39.8% to just 12.5%, the Government of Guyana (GoG) remains reluctant to introduce ring-fencing provisions to protect the country’s oil revenues.

Ring-fencing would prevent ExxonMobil from using revenues generated by existing developments to recover the costs of new projects. Instead, the company would be required to recover the costs of each development from that particular project’s production.

Sources within government told Kaieteur News last week that the eight project, Longtail, is still being reviewed. The senior official however noted that if approved, the new development is not likely to feature a ring-fencing clause as the 2016 Production Sharing Agreement (PSA) makes no provision.