- Dec 16, 2019 12:35 pm GMTDec 15, 2019 7:42 pm GMT
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Guyana Must Roll Out Sovereign Wealth Fund as Soon as Possible
When analyzing Guyana’s production sharing agreements (PSAs), it is important not to be misled by statements comparing Guyana’s 2% royalty with higher royalties in other countries (set on average at about 10%-15%). Oil and gas contracts are complex, comprising several different parameters, which only when considered all together produce a petroleum fiscal framework that can at least ‘partially’ be compared with other petroleum fiscal frameworks. In other words, putting attention only on one single parameter is not very useful. As proof of that, for a prospective investor, each of the three main types of petroleum contracts ─ royalty and tax agreements, PSAs (the type present in Guyana), and service contracts ─ may all produce the same result if the underlying parameters are structured toward that goal.
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