From 2020, Guyana will have nine blocks of active lease oil, six of which have been actively generated. [5] The Petroleum Division of Guyana Geology and Mines Commission is responsible for monitoring exploration in Guyana. The agreement became controversial in Guyana last year and the treaty was issued by the government at the end of 2017 to allow for public control. The financial model and accompanying narrative are based on this contract, as well as public statements and media reports detailing reserves, development times and costs. The relatively poor performance of Stabroek`s conditions, first signed in 1999 and modified in 2016 after the first major discovery of the previous year, applies in many market conditions and field size. Exxon`s initial licence for the Stabroek oil block off the coast of the Guyanese Caribbean dates back to 1999. But in April 2016, after Exxon found oil in the block, the company began pressuring Guyana authorities to sign a new contract to renew its oil license, knowing that its existing license has expired. But what matters is that Guyana – a poor former colony, first the Dutchman, then the British – is not prepared for what will happen. Its oil laws were written in the 1980s. The Department of Energy has an annual budget of $2 million.

Five years after Exxon`s discovery, the country has yet to complete the development of new relevant laws, nor has even put in place a regulator to oversee exploration and production. Last year, the government created a sovereign wealth fund to absorb up to $5 billion in oil revenues a year by 2025, but there is no plan to spend it. When Liza-1 hit oil, Lars Mangal, one of Guyana`s leading oil professionals, knew exactly what to do. He worked for two decades in oil services around the world for Schlumberger Ltd, based in Houston, before landing in the UK. Now he`s had to pack his stuff, go back to Georgetown, rent a shipyard and offer Exxon`s service contract. “He`s the big one,” recalls Mangal, who turns 54 in August. In 2016, Exxon had a problem. Its agreement with Guyana was 17 years old and, under the complex conditions of the agreement, the supermajor no longer had time to find more oil. This was an opportunity for the new Guyanese government, now led by Granger, to update the 1999 treaty and find better conditions. Such negotiations are a good balancing act for governments: push too little and you get too little; Push too hard, and the company could go away. The Petroleum (Exploration and Production) Act 1986 (PEPA) gives the government the power to issue licences for oil exploration and production.

[5] The Natural Resource Fund Act 2019 created a fund for the proceeds of the state`s oil activities, to be managed by the Bank of Guyana. [18] Guyana is one of the world`s newest oil-producing regions and made the first commercial crude oil draw in December 2019. Crude oil is sent abroad for refining. The controversy over the 2016 contract does not end there. According to an analysis of the agreement reached by Rystad Energy AS, an Oslo-based consulting firm, Guyana earned about 60% of oil profits, with the rest going to Exxon, Hess and Cnooc. Instead, in October 2016, the government and Exxon changed the terms of the existing 1999 agreement. Both treaties have provisions contrary to the Petroleum Exploration and Production Act, whereas, as these columns have shown, the 2016 agreement was incredibly generous.