Guyana is preparing to raise the take of the government in future oil licenses, the director of the South American country’s Department of Energy said on July 3.
U.S. energy giant Exxon Mobil Corp., French group Total and Britain’s Tullow Oil are drilling wells offshore Guyana, where Exxon Mobil has discovered over 4 billion barrels of oil, a major global find.
“Royalties will all have to be examined. We expect them to be higher than they currently are,” Mark Bynoe told Reuters on the sidelines of an industry conference in London.
Guyana is preparing a licensing round for acreage in both shallow and deep water for third-quarter 2020. Those licenses would fall under the new regime, he said.
“Currently, our position is that it wouldn’t affect existing contracts,” Bynoe said.
Last month, Clive Thomas, the director of Guyana’s State Assets Recovery Agency (SARA), which was set up in 2015 and has a mandate to pursue corruption, said a probe was ongoing into how previous licenses were awarded.
“We are investigating, particularly the Kaieteur and the Canje [blocks], but in fairness to everybody—all the parties to the issue; we have to investigate all,” Thomas said.
Bynoe declined to comment when asked about the scope and possible repercussions of the SARA probe, adding SARA was an independent body.
Eco has said they are not aware of any probe that could affect its work in Guyana, Tullow has said it was not concerned and Hess—partnering with Exxon Mobil in Guyana—has said authorities had assured it that contracts would be respected.
The company also said it expects to generate substantial free cash flow in 2018, allowing it to initiate a dividend in the first-quarter of 2019.
A U.S. appeals court on March 28 supported a lower court’s finding that Italian oil producer Eni SpA breached a contract with offshore drilling contractor Transocean Ltd., but voided a $160 million damages award.
A French court has rejected an urgent request by environmental groups, including Greenpeace and Friends of the Earth, to deny oil and gas major Total permission to proceed with plans to drill off the coast of French Guyana.