Guyana still without independent oil sector regulator

May 02, 2023 ExxonMobil, News, Oil & Gas

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Eight years later…

…Jagdeo says Petroleum Commission ‘not likely’ soon

Kaieteur News – This month, makes 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. One of the key regulatory architectures that remains in limbo is the Petroleum Commission Bill that would pave the way for the appointment of an independent regulator.

The Petroleum Commission Bill was initially proposed by the APNU+AFC for the establishment of an independent body which would hold responsibility for monitoring and enforcing Guyana’s modernised petroleum laws, policies and oil agreements. The body is also intended to ensure oil companies comply with health, safety and environmental standards.

On May 8, 2017, then Minister of Natural Resources, Raphael Trotman had tabled the Petroleum Commission of Guyana Bill 2017 during the 64th Sitting of the Eleventh Parliament. The passage of that Bill would have seen the creation of the Petroleum Commission of Guyana which will oversee and manage Guyana emerging oil and gas industry. The Petroleum Commission of Guyana will have the responsibility of monitoring and ensuring compliance with the policies, laws and agreements for petroleum operations. It would have also, inter alia, be responsible for ensuring compliance with health, safety and environmental standards and ensure local content and local participation in all of the activities. Also, the commission would have been tasked with researching efficient, safe, effective and environmentally responsible exploration, development and production of petroleum in Guyana, including the optimum methods of exploring for, extracting and utilising petroleum and petroleum products.
The new regulatory body will also have an advisory role to the Minister on matters related to the conduct of the industry.

The Bill was however sent to a Special Select Committee since its most fatal flaw or characteristic was that it gave the Natural Resources Minister a toxic level of control over the said body.
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.

Natural Resources Minister, Vickram Bharrat in March 2021, had stated that within a matter of weeks, the independent regulator the government promised to establish for the oil sector would be in place. Minister Bharrat was also quoted on the Guyana Basins Summit website as saying that the Commission is needed so it can “manage this emerging sector without political interference.”

For his part, Attorney General, Anil Nandlall, had told Kaieteur Radio during an interview that the Bill is at the Ministry of Natural Resources and it is being actively considered by a Legal Department within that Ministry. That was when the Attorney General cited that changes are likely to be seen.

It has been 33 months since the since the PPP/C Government assumed office and President Ali is yet to honour its promise to the nation. Additionally, at his recent press conference, Vice President Bharrat Jagdeo said that establishing the Petroleum Commission is not something the Government of Guyana (GoG) will be doing anytime soon.

The Vice President was asked by a reporter about the appointment of the Commission, which he had promised. “A commission (is) still on the cards, but it’s not like on the verge…” Jagdeo responded. In his response, he also explained that the government is exploring several areas to enhance Guyana’s archaic petroleum laws. Jagdeo said, “…right now we are moving forward with two elements of that framework we have done several already. The two that we are working on the PSA (the new Production Sharing Agreement for future oil blocks) and the petroleum act (the 1980’s Petroleum Exploration and Production Act.)

According to the Vice President, at this time the Ministry of Natural Resources will continue to operate as the technical body, but added that in the future the government will look at avenues to establish the independent oil sector regulator.

The Vice President recent statement at his press conference has changed from what he had previously said. In 2020, days after Irfaan Ali was sworn in as President, Jagdeo had said that the body was important would be developed within six months, then in 2022, he stated that the body could not stop corruption, but that government had not thrown the idea out the window.

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• agreements, Guyana, Petroleum Commission, policies, regulator

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