Minister of Natural Resources Vickram Bharrat announced that negotiations with Sispro Inc. are progressing steadily, with optimism that a Production Sharing Agreement (PSA) could be finalized before the year ends.
Sispro, a company led by four Guyanese businesswomen, was awarded Block S3 and Block D2 during the 2023 oil blocks auction. The company is currently working to finalize its operating arrangements to meet government requirements.
“We have consistently expressed our desire to collaborate with Sispro, which is why I am hopeful they can secure an operator and we can sign as soon as possible—ideally this year,” Minister Bharrat stated during a press briefing following the PSA signing with Ghanaian oil company Cybele Energy for shallow-water Block S7.
When asked about delays in finalizing the agreement, Minister Bharrat explained that Sispro needs to secure a qualified operator with the necessary technical and financial capabilities. “They obviously need an operator with the kind of credentials and balance sheet required to execute the work program, as we will not sign an agreement with companies that cannot meet those standards,” he added.
On Tuesday, Cybele Energy became the second company to sign a PSA with the government, which included a US$17 million signing bonus. Under Guyana’s new oil management regime, the minimum signing bonus for shallow blocks is US$10 million.
Additionally, last month, a consortium of TotalEnergies, QatarEnergy, and PETRONAS signed the first PSA under the new fiscal regime for Block S4. The updated model, introduced during the 2022 licensing round, raises the royalty on oil from 2 percent to 10 percent, caps cost recovery at 65 percent, and adds a 10 percent corporate tax, while maintaining a 50/50 profit-oil split after cost recovery.
Minister Bharrat’s hopeful perspective on the Sispro negotiations underscores the government’s commitment to fostering local participation in the burgeoning oil sector.
