GGMC booted from future oil decision-making processes with new draft PSAs

Mar 22, 2023 News

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Kaieteur News – The Guyana Government has released two new draft Production Sharing Agreements (PSA) that are to govern the future of oil exploration and development in the country, specifically in relation to the offshore production of Hydrocarbons from its Exclusive Economic Zone (EEZ).

Following the release of the draft agreements, the public was given 14 days to provide input and feedback.

A perusal of the two new drafts released—for deepwater and shallow water blocks—in comparison with the PSA for the Stabroek Block, at the onset illustrates a glaring change.

That is, the Guyana Geology and Mines Commission (GGMC), has essentially been booted from the decision-making processes to be involved in the future exploration, development and production of crude oil and, or associated gases.

In the now universally maligned contract that was inked under the hand of the then Substantive Minister Raphael Trotman, there are identified, in the body of the Agreement—prefacing its entailing Articles—of itself, eight ‘whereas’ clauses, but in the new PSAs, it is observed that this has been reduced to six.

Both of the missing clauses dictate roles of the GGMC. According to the contract/PSA, inked by Trotman back in 2016, the second and sixth whereas clauses are dedicated to the GGMC.

In the first instance, it stipulates that GGMC is a body corporate established under the laws of Guyana that is responsible for among other things, planning and securing the development, exploitation and management of petroleum, as defined in the Act “so as to ensure for the people of Guyana the maximum benefits therefrom and for doing such things in relation to.”

The second whereas clause of the agreement states that, “GGMC has been authorized by the Minister to assist in support and the negotiation of this Agreement, Subject to the provisions of the Act and Regulations and to the final written approval of the Minister of its contents and execution thereof and to assist in the administration and implementation thereof.”

When compared to the new agreements, the words Guyana Geology and Mines Commission or its acronym GGMC have been completed removed.

In representing itself on its digital portal, GGMC outlines as its vision fortifying “our position as the repository for all incidental and geoscientific data pertaining to Guyana’s mineral resources (including petroleum), mining and development experiences.”

The GGMC’s mission is “to promote; facilitate, monitor and regulate for sustainable utilization of Guyana’s minerals’ resources (including petroleum). To provide effective stewardship of Guyana’s minerals resources (including petroleum) through the deployment of competent human resources employing innovative tools and methods, research and analysis.  To collaborate with relevant stakeholders in an enabling environment for optimum, mutually beneficial outcomes.”

GGMC was created in 1979 from the Department of Geological Surveys and Mines which itself was the successor to the Geological Survey of British Guiana. Currently GGMC is divided into a number of technical divisions including, Geological Services, Petroleum and Land Management among others.

With the 14-day review period announced by the administration for the review of the new PSAs, it has been met with some push back from sections of society calling for a longer review period.

Last week, Environment and Democracy Advocate, Simone Mangal-Joly, in a letter to the substantive minister, Vickram Bharrat, copied to Rosalinda Rasul, Head, Diaspora and Remigration Unit, Ministry of Foreign Affairs and shared with the media, lamented that the 14-day period would in fact serve to undermine the entire purpose of releasing the documents in the first place.

She posited that while it’s commendable that Government released the drafts for comments, “unlike government officials, citizens are not paid employees of the state and can only read such documents during their after work hours.”

To this end, she posited that 14 days, “Is also prohibitive when it comes to procuring qualified specialists to provide advice so that citizens and civil society organisations can make informed representation to government.”

As such, she contends, that the allocated two weeks-time period, “cannot possibly allow the Government to fulfill Guyana’s commitments under the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the International Labour Organisation Convention 69 (ILO69) for Free Prior and Informed Consent (FPIC) of indigenous peoples.”

She has since recommended that an effective effort would firstly provide reasonable time for the public to engage with the material and for appropriate levels of participation. Secondly, “outline a clear procedure for how feedback will be received and made transparently available for all to see,” she further said.

Mangal – Joly has since also called for a clearly outlined mechanism that will be used to report on how public feedback was addressed in the development of the final model agreement. As it stands, Mangal-Joly observes that the current 14-day period “does not meet requirements for an effective public consultation process” and as such suggested that government may wish to, “extend this period to 45 days.”

This is in order to engage and prepare the National Toshao’s Council to actively review the draft and provide feedback from their communities; and identify the mechanism for receiving public feedback, making comments publicly available, and reporting on how these comments were addressed in arriving at the final model agreement.

She suggested too, making use of digital platforms would enhance access for indigenous and non-indigenous communities across the country, and participation of the diaspora community, whom the Government has repeatedly asked to participate in building Guyana into a more prosperous country.

Additionally, she noted that the Diaspora as a critical stakeholder that plays a pivotal role in financing social development and social safety nets through family remittances, “and has carried a major burden of compensating for lacklustre development policies and poor distribution of economic gains for decades” should press government to make good on its stated interest in engaging the Diaspora.

The Opposition echoed similar sentiments. Speaking at a press conference recently, Elson Low, the Economic and Youth Policy Advisor at Office of the Leader of the Opposition (OLO), posited that the National Assembly presents the correct forum for the document to be properly reviewed.

He was at the time lamenting the short timeframe that was given for a national review of the draft new model PSA, asserting that the government should instead allow Guyanese more than two weeks to examine the very crucial document.

“What we are saying is that this document needs to be laid in the National Assembly for it to be properly ventilated so that all of the different areas, some of which will [still] not be apparent after two weeks, can be put out so that the public can have an understanding of it and so that we can address them,” Low said.

In making the announcement recently, it was noted that the draft Model Petroleum Agreements embodies rigorous research and analysis by the ministry’s internal team, and external consultants on all topics relevant to a modern petroleum agreement for Guyana.

“The process involved a comprehensive assessment of the current petroleum agreement and the identification of best practices relevant to every contractual aspect of a modern agreement grounded in the Guyana context.”

According to the ministry, in order to ensure new investments are governed by a comprehensive framework of international best practices, the Model Petroleum Agreements will be followed by an overhaul of the 1986 Petroleum Act and Regulations.

Referencing the two weeks, time period allocated for public input, it was noted that feedback on the draft model agreements should be addressed to the Minister of Natural Resources and sent to [email protected] with the Permanent Secretary copied, [email protected].

As the administration finalizes the new PSA, it was noted too that this is being done also, in preparation for the upcoming Licensing Round Schedule and will reflect the new timeline for the publication of the finalised Terms and Guidelines, Model Petroleum Agreement and process of bidding — all adjusted to facilitate maximum participation from global interest.

According to the Ministry, official Expressions of Interest (EOI) have been received for all fourteen blocks for tender in the upcoming Licensing Round, demonstrating global interest in Guyana’s shallow and deepwater offshore acreage.

“The Model Petroleum Agreements represent the People’s Progressive Party Civic (PPPC) Government’s commitment to its manifesto promise of establishing a model PSA, guided by industry standards and best practices.”

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• Guyana Geology and Mines Commission (GGMC), Minister of Natural Resources, Production Sharing Agreements (PSA, Raphael Trotman, Vickram Bharrat

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