Introduction
Column 19 last week summarised how petroleum produced is shared between the Contractor and Guyana represented by the Minister. Now, if the parties were to take their respective shares and act independently, selling their share of the crude, or refining and selling it as they wished, there would be no need for the Agreement to include any provision or rules concerning valuation. In Guyanese parlance, that would be their business. In other words, Guyana can do as it wishes with its share while the Contractor will be able to do likewise. But life is not so simple, nor are petroleum operations.
Guyana’s share of the production, at least in relation to the Liza Block, is a minimum of 14.5% of the number of barrels of oil produced (2% for royalties and 12.5% as minimum profit share). In column 19, I had expressed the view that for practical purposes, Guyana will not physically take up its share and will more than likely request ExxonMobil to refine and dispose of its uptake. I admit that I am discounting, at some risk, the possibility that Guyana may choose to sell its share at the wellhead to one of the other joint venture partners in the Liza Block.
Recall that the shares in the Joint Venture are held