Understanding Guyana’s Evolving Petroleum Agreements

Disclaimer: The following represents my personal analysis and opinion, shared for those who may be interested in understanding the evolution of petroleum agreements in our region.

In 2017 I had already published this item on both LinkedIn as well as on my previous website.

Preface: A Journey of Professional Curiosity

In the spirit of intellectual inquiry and regional energy sector development, I wish to pose two seemingly innocent, yet fundamentally important questions regarding Guyana’s Petroleum Agreement.

These questions arise from my personal analysis and are presented with the utmost respect for all parties involved, purely for the purpose of understanding and contributing to informed discourse within our professional community.

Historical Context: The Genesis of My Analysis

Shortly after the announcement of the Liza-1 Giant field discovery at the end of May 2015, I undertook a comprehensive re-analysis of the Guyana-ExxonMobil contract.

This was not my first encounter with this agreement—I had previously conducted extensive analysis during my involvement in crafting Suriname’s Production Sharing Contract (PSC) between 2008-2010, specifically to ensure that our framework would avoid certain structural elements present in other regional agreements.

During that earlier period, I had systematically analyzed all publicly available petroleum contracts in the region, publishing detailed, critical assessments on my former website.

These analyses provided comprehensive overviews of advantages and disadvantages, article by article—a rather tedious but necessary exercise that I undertook without compensation, driven purely by professional interest and regional development concerns.

Professional Observations and Public Response

Upon reviewing the original Guyana agreement, I found myself genuinely surprised by what I perceived as certain contractual imbalances. The analysis I published apparently resonated with many readers in Guyana—Google Analytics revealed thousands of visitors from Guyana reading these articles, with detailed engagement metrics showing substantial time spent reviewing the content.

Subsequently, the petroleum agreement became a subject of considerable public discourse in Guyana, generating what could only be described as a tsunami of discussion in the press. This led to various studies, including World Bank involvement to review the contract structure. While their official conclusions were never published, newspaper reports suggested findings that aligned with observations I had shared months earlier on my website.

The agreement became a favored subject of analysis by major consultancy firms, many reaching similar conclusions regarding areas for improvement—conclusions that echoed the recommendations I had previously outlined. Eventually, public attention moved on with the flow of petroleum revenues, but the fundamental questions about contract optimization remained.

The Two Questions That Puzzle Me

Allow me to present two straightforward questions that have occupied my thoughts:

Question 1: Timeline and Contract Evolution

The Liza-1 discovery was announced on May 20, 2015. The petroleum agreement I have reviewed bears a signature date of June 27, 2016—sixteen months after the discovery announcement. This temporal sequence suggests that what we’re examining may be a second, amended, and re-negotiated agreement (Version 2), rather than the original framework under which exploration proceeded.

Question 2: Royalty Structure Modification

The agreement I analyzed includes Article 15.6, which establishes a 2% royalty rate. However, the original contract I had previously studied contained a 0% royalty provision—an element I had noted as particularly difficult to comprehend from a resource-owning nation’s perspective, along with several other provisions regarding taxation structures.

An Appeal for Professional Discourse

I pose these questions to the professional community with genuine curiosity: Would anyone be willing to comment on this apparent evolution of the contractual framework? I would be deeply grateful for any insights that might illuminate this timeline and the modifications that may have occurred between the original agreement and the post-discovery version.

I recognize that discussing petroleum agreements can be professionally sensitive territory, particularly during periods of industry growth and opportunity. However, I believe that respectful, informed dialogue about contract structures serves the broader interests of regional energy development and best practices.

Closing Reflection

These questions arise not from any desire to criticize, but from a genuine professional interest in understanding how petroleum agreements evolve, particularly following major discoveries. The transformation of contractual terms between pre-discovery and post-discovery phases represents an important case study for future regional energy development.

I thank anyone willing to engage with these questions and contribute to our collective understanding of petroleum agreement dynamics in the Caribbean basin. Such discourse, conducted with mutual respect and professional courtesy, ultimately serves the interests of all stakeholders in our region’s energy future.

For those brave enough to risk engaging in this discussion during these prosperous times for the fossil fuels sector, I express my sincere appreciation in advance.

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About the Author:

Marcel Chin-A-Lien
Senior Energy Advisor & Petroleum Contracts Specialist
Former Contributor to Suriname PSC Development (2008-2010)
Regional Energy Sector Analyst

With extensive experience in petroleum contract analysis and regional energy development, Marcel has contributed to major petroleum agreement structuring across the Caribbean basin. His expertise encompasses comparative contract analysis, fiscal regime optimization, and strategic energy sector advisory services.

Contact: marcelchinalien@gmail.com
Professional Focus: Petroleum Agreements, Regional Energy Development, Contract Analysis

Post Data:

In february 2025 I was priviliged to have a very informative chat on LinkedIn, on this theme with dr. Chevy A. Devonish, Legal expert of Guyana, where he explained the chronology of the contract and amendments.