In response to what he termed as ‘misleading’ media reports, Dr. Bharrat Jagdeo, the General Secretary of the PPP, clarified that the Guyana government will not be reimbursing Repsol for the 500 million US dollars invested in exploration activities in the Kanuku block, which did not lead to production.
Dr. Jagdeo emphasized that the government has yet to make a decision regarding whether Repsol will be granted a new license to continue exploration activities in the Kanuku block, as per their request.
He debunked recent reports suggesting that a decision on this matter had already been reached.
Repsol’s ten-year prospecting license for the Kanuku block expired in May of this year. Dr. Jagdeo further explained that if a prospecting license expires without progress towards production, the investor essentially forfeits all incurred exploration costs. Therefore, Repsol would only be eligible for exploration cost recovery if they secure a new license that ultimately leads to production.
Should Repsol’s request for license renewal in the Kanuku Block be approved, Dr. Jagdeo indicated that there would be an increase in government revenue through higher royalties, taxes, and a statutory signing bonus, among other considerations.
Radha Motielall, NCN News