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Archaic petroleum law among four legislations identified for review – Ministry’s brief
Kaieteur News – While the Government of Guyana has been pushing ExxonMobil Guyana to accelerate its exploration and production of the country’s oil and gas resources, the country has been operating with archaic petroleum laws.
In the recently published Ministry of Natural Resources brief, the Petroleum (Production) Act Petroleum (Exploration and Production, E&P) Act was listed among four legislations that were identified for review and enhancement.
It was stated that the Government seeks to modernise its legal and regulatory framework as it relates to the petroleum sector to address issues such as oil revenue management, licensing, Production Sharing Agreement models, local content, and Health, Safety, Environmental and Security (HSES) management.
According to the ministry’s brief, the result would be maximising the economic benefits to the country, improve management of the technical, environmental, social and financial risks linked to the sector and building capacity to engage effectively with investors.
The other legislations to be reviewed and enhanced include the Guyana Geology and Mines Commission Act, the Mining Act and the Environmental Protection Act Occupational Safety and Health Act. Also mentioned was the Upstream Legal Requirements for Petroleum and a Model Production Sharing Agreement.
Former Finance Minister, Winston Jordan last year warned that, “Accelerated production in the absence of modernised laws and the strengthening of institutions is what I would consider a fatal flaw in the management of the sector. I see why they want more oil production because of high prices and to monetise the resource quickly…”
In December 2020, the Inter-American Development Bank (IDB) had released a brief pointing out the glaring loopholes in Guyana’s legislative framework which essentially weakens the shield of protection that is needed for the oil sector. According to the Bank, Guyana’s Petroleum Exploration and Production Act and the Petroleum Commission Bill, in their current state, do not contain any clauses that guarantee the independence of any regulator that is appointed for the sector nor do they ensure adherence to industry norms.
Upon assuming office in August 2020, the PPP administration had promised an overhaul for Guyana’s petroleum laws. In fact, President Irfaan Ali during his inauguration address pledged to establish a Petroleum Commission to insulate the oil and gas sector from political interference. However, that has not been done and May 2023 will make eight years since Guyana is without an updated legislative and regulatory framework that is essential for the protection of the oil industry against mismanagement and corruption.
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