Exxon Drillship in Stabroek Block Guyana
GUYANA: OIL: – By OilNOW – October 18, 2018
As interest mounts about the nature of farm-in agreements in South America’s newest oil and gas hotspot – Guyana – OilNOW takes a look this week at what the term means, why it is used and to what extent do companies enter such deals in the petroleum industry.
A farm-out agreement operates as a type of sale and purchase agreement under which a seller (the “farmor”) agrees to transfer part (but not all) of its interest in an upstream asset to the buyer (the “farmee”), in exchange for that buyer agreeing to undertake (or fund) work obligations such as acquiring seismic data or drilling wells in respect of that asset.
In the context of the oil and gas industry, the upstream “asset” being transferred is usually an interest in a license, production sharing contract, or other concession, granted by a government to a company to explore for and produce oil and gas.
READ MORE: https://oilnow.gy/featured/small-companies-often-farm-out-acreage-to-raise-capital/
Comments
Very complex issues here.
Reads DAVID V GOLIATH scenario !
Where giant wins but no draws with government as referee ! With “land” being
used as collateral to increase capital/cash
flow….open to abuse/corruption….with pot of black gold at end of rainbow !
Am neither economist or oil guru but
can smell rotting fish. Corruption ?
Land and oil belongs to the people
with government the regulator on its
distribution/use age.
Joint development of newly discovered
wealth must remain 50/50 public/private
parthnerships !
Govt to regulate
Private to speculate
Transparency and accountability way forward.
No ifs or buts
Kamtan uk-ex-EU