Guyana
initiated a new top-quartile fiscal regime to encourage exploration.
After commercial production begins, the Licencee is allowed to recover
all capital and operating costs from "cost oil,’ which
for the first three years is up to 75% of production and thereafter up
to 65% of production. The Licencee share of the remaining production
or "profit oil," for the first five years is 50% of the first
40,000 barrels of oil/day and 47% for additional production; and thereafter
45% in full satisfaction of all income taxes and royalties. Using
full-cycle economics, including recovery of capital and operating
costs, the Licencee’s share of gross revenue is estimated to
be 63%.
