Cybele Energy risks losing oil block if signing bonus remains unpaid

Five months after signing an oil exploration agreement with the Guyana government, the Ghana-based Cybele Energy is yet to pay the promised $17 million signing bonus, prompting a warning by Minister of Natural Resources Vickram Bharrat that that company risks losing the 2,000 square kilometer shallow water offshore concession.

“They would have indicated a payment of 30% first week June.  And then in six weeks time they will pay the remaining amount…Failure to pay means that there is no obligation by the government to continue the agreement,” he told reporters.

The money should be paid into the Natural Resources Fund.

Cybele should have paid the signing bonus within 30 days of inking the exploration agreement, but now Mr Bharrat said the company has been penalised with an additional US$4 million in accrued interest for failing to stick to its bargain.

He said his ministry’s legal team was in contact with the company, though there is no clear method prescribed by law for the payment of the signing bonus.

Mr Bharrat declined to link the company’s failure to pay the bonus so far with its ability to execute its work programme, saying that could depend on finding a globally recognised operator with a good balance sheet to do so.

“I don’t think we should tie payment of a signing bonus to fulfilling a work program,” the minister said.