Mexico to help Guyana strengthen regulatory capacity for oil sector -expert says nation has key opportunity to “get it right’

Oct 04, 2018 News

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By Kiana Wilburg
Oil and gas experts from Mexico will be working with Guyana to help strengthen this nation’s regulatory capacity for the petroleum industry.
This was confirmed yesterday by Carlos De Regules, Executive Director of the Agency for Security, Energy and the Environment (ASEA) of Mexico.
During an interview with Kaieteur News at the Mexican Embassy, the founding Director of ASEA said that Guyana has a key opportunity to “get it right’ with oil and gas, and Mexico is happy to help in any way it can. In this regard, Regules revealed that Mexico will soon be welcoming officials from Guyana’s Environmental Protection Agency (EPA) and the Department of Energy for internships.
He said, “An EPA official will be going to a four to five week training programme with ASEA while three officers from the Department of Energy will be going to the Petroleum Institute of Mexico. I think a take away from that internship would be to identify a critical pathway to regulation in Guyana.”
The ASEA Executive Director said that Mexico, which has been in the industry for over a century, will help Guyana identify what are the top five regulations it needs to have in place and “then work that backwards and see what needs to be done immediately, in the next few weeks and in the months to come…”
He added, “This will help Guyana arrive at the appropriate regulatory framework. We will also ensure that the Guyanese representatives get a chance to go into the field and they are able to smell the oil and listen to the pipes and really have a feel of the oil and gas industry.”
Regules said that he is also proud of the experiences Mexico was able to share with Guyana during the recently concluded training workshop on best practices in the oil industry.
BEING ROBUST AND INDEPENDENT
A robust and proactive regulatory body is a central part of the institutional framework needed for a petroleum sector. But if this authority is to do its job effectively, it must be independent. It must be free from any instance of political interference. This point was also made pellucid by ASEA’s Executive Director.
In an interview with Kaieteur News, Regules said, “You have a very interesting situation in Guyana. You are at the beginning of a new moment in history. The country is going to move from being dependent on certain economic activities and it is going to become a regional hub; a very important place for oil and gas in the region. And Guyana has an opportunity to make it right from the start because you have a clean sheet of paper for this sector.”
The Executive Director of ASEA continued, “So before achieving full scale development of the oil and gas resources, Guyana has the opportunity to create an institutional framework that make the sector stakeholders operate in a responsible manner…”
The Mexican official added, “But I can’t stress enough that one of the ingredients of this institutional framework will be astute and honourable regulators. One of the characteristics of a good regulator is independence. You want regulators who are defining the rules for the long run, to be independent from the political cycle. They should also be financially independent so they can plan for the long term and have the resources to do so.”
The Oil and Gas Expert said that the sooner Guyana can have strengthened systems for environmental regulation in place, then it would be better off in terms of managing the sector.
Regules said, “The sooner you are able to provide the rules of the game then the sooner oil and gas investors will be able to make investment decisions that are based on a sound regulatory framework.”
In addition to this, the Executive Director of ASEA said that the Government would be able to provide the people of Guyana with the certainty that there are regulators and institutions in place that will take care of their interest.
Regules concluded, “It is a good moment for Guyana but don’t wait too long to regulate it.”
Guyana’s Environmental Protection Agency has faced criticisms from various sections of society, all of which highlight the fact that it is unprepared to deal with the challenges of an oil sector. EPA’s laws are not only outdated in several respects but fail to address the needs of a demanding oil industry.
The Authority also lacks capacity to properly review Environmental Impact Assessments (EIA) for oil companies. In fact, it had to leave the evaluation of ExxonMobil’s EIA for the Liza Phase Two Project in the hands of another foreign company. The contract for that project was awarded last, several weeks ago.

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