Petro-Expectation and Agitation in Guyana’s Extractive Oil and Gas Industry: Renegotiation, Pre-Investment Costs, Auditing, and Taxation

Abstract: Since 2015, Guyana has been recognized as a rising star in the mineral industry due to numerous discoveries of mineral reserves. The country is currently producing 900,000 barrels of oil per day, and by 2027, it is expected to join the elite group of countries producing over one million barrels of oil per day. A qualitative approach has been employed to analyze efforts to renegotiate the contentious 2016 production-sharing agreement, audit the oil giant’s pre-investment costs and taxation in Guyana’s lucrative oil and gas sector. The results suggest that renegotiation prospects are unlikely, and there have been discrepancies in the submissions of pre-investment recovery costs and unfair taxation. These issues stem from imbalanced oil production agreements, foreign reliance, domestic political divisions, a lack of political will on the part of the Guyana government, and the partisan practices of oil companies. As a result, despite Guyana’s advantageous position in the mineral industry, the country has not fully benefited from leasing its oil and gas resources to ExxonMobil and its consortium. It is recommended that future production agreements include more stringent provisions to align with those of other oil- producing countries in the region. In a worst-case scenario, Guyana should consider placing a moratorium on leasing oil permits for future projects until favorable conditions and terms are agreed upon. Most importantly, it is crucial for the two main ethnic groups in Guyana, Africans and Indians, to work together towards maximizing the benefits of leasing Guyana’s non- renewable resources to multinational corporations.