Three years later…Govt. now searches for Consultant to modernise laws for oil sector

May 02, 2019 News

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By Kiana Wilburg
With first oil just around the corner, the APNU+AFC Administration is now looking for a consultant to modernise laws needed for the efficient governance of the oil and gas sector.
With funding provided by the World Bank, the government via an advertisement said i

t needs a consultant to provide advisory services and technical support on legal and regulatory frameworks for the oil and gas sector to the Government, through the Department of Energy (DoE), under the Ministry of the Presidency.
According to the present Terms of Reference, the Consultant will be required to prepare draft revised legislation and regulations required to support the update of Guyana’s legal and institutional frameworks for the governance, management and oversight of the oil and gas sector, including but not limited to petroleum laws and regulations pertaining to operations, occupational health and safety, environmental management, maritime operations, etc. This would be done on the basis of existing institutional, legislative and regulatory gap analysis and revision documentation.
The Consultant is also expected to provide general advice on legal and contractual matters arising from the administration/management of existing Petroleum Agreement(s), including matters concerning assignments, terminations, events of default, force majeure, disputes, dispute resolution and cost recovery audits, etc.
The official will be expected to support the Attorney General’s Chambers in the review, assessment and re-drafting necessary to ensure the draft legislation is in good order for presentation to the National Assembly for passage into law.
The Consultant will be required to prove legal advice on the marketing of crude oil to ensure that the marketing will be transparent, efficiently organized and that marketing agreements are in place prior to first oil; advise on and provide a framework detailing the legislation and regulations required for the comprehensive development of a petroleum downstream sector and support the drafting of such legislation and regulations initially focusing on the use of associated gas; and provide ad hoc legal advice on and recommendations concerning matters arising from DoE’s governance and management of the petroleum sector.
In addition to this, the official will be expected to provide constructs for the transfer of knowledge, including mentoring arrangements, to Guyanese lawyers within the Department of Energy, Attorney General’s Office and other ministries/agencies as identified by the DoE, on legal aspects of the petroleum industry.
The advertisement noted that these activities are estimated to take place over a period of four years starting this year.
The Consultant will be expected to be physically present in Guyana for a specified number of days per month and the contract will initially be issued for one year with a possibility of renewal for the duration of the Project period based on performance. (See link to access the full details of the advertisement: https://motp.gov.gy/index.php/notices/terms-of-reference/3524-terms-of-reference-consultancy-services-for-advisory-services-on-legal-matters-in-the-oil-and-gas-industry?fbclid=IwAR00-t87exgGv49KZBsDILaWRIRl44_amDRaW90oasAOxav5KdpP0tIlCxg)
RELENTLESS CALLS
For over three years, local transparency advocates called on the government to review all laws that would be needed to govern the oil and gas sector. They stressed that this was necessary before the commercial production of oil in 2020.
Even Chatham House, an international transparency body that helps countries with the governance of their extractive sectors, said that if Guyana intends to be successful with the governance of its oil sector, it must ensure that there are clear oil-related policies and systems to ensure accountability of the oil wealth to come.
The London-based body recommended that policies for the oil and gas sector be guided by a clear vision for the development of the country and a strategic view of how the petroleum sector will deliver that vision.
Speaking to other guidelines, Chatham House warned that the rush to adopt international best practices may not always be appropriate in the case of emerging producers in the oil and gas sector. Instead, Chatham House said that the government should aim for more appropriate practices, taking account of the national context.
Chatham House said, “In order to attract the most qualified oil company to a country with an unproven resource base, the host government can invest in geological data, strengthen its prequalification criteria and ensure transparency. It should also plan for success and anticipate the implications of hydrocarbon discoveries in its tax code, and be robust through declining oil and gas prices.”
As for the aspect of licensing, Chatham House said that this is a key mechanism whereby government can reap early revenues and maximize long-term national benefits. It said that Government must ensure that it simplifies both negotiations and tax structures to mitigate knowledge asymmetries with oil companies.
It said, too, that the government and industry must engage and share information with communities to manage local expectations regarding the petroleum sector and build trust.
“In emerging producers, budgets for local content may be small and timelines for building capacity short. In this context, the focus should be on the potential for repeat use of any local capacity developed. Additionally, meaningful participation of national organizations in resource development is a central objective of many emerging producers.”
The international body said that once the aforementioned are followed, Guyana would be well on its way to laying a strong foundation for the protection of the oil sector.

 

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