Govt. proposes arming Natural Resources Minister with sweeping powers over oil sector

Jun 21, 2023 ExxonMobil, News, Oil & Gas

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– A commission “may” assist him with his duties

Kaieteur News – The Peoples Progressive Party Civic (PPP/C) Government’s draft Petroleum Activities Bill 2023 proposes to vest the Natural Resources Minister with sweeping powers over the hydrocarbon industry.

According to the draft document, the minister shall be empowered to administer the licensing of petroleum exploration, production, storage and transportation operations; cooperate with the relevant government agencies regarding environmental and safety aspects of petroleum operations; and oversee the conduct of petroleum operations to ensure compliance with the new law, and the terms of the respective licences and petroleum agreements.

The minister is also proposed to have the power to inspect petroleum operations, seek corrective action and impose sanctions for non-compliance,develop terms of reference and qualification criteria for the grant of exploration and production rights, and grant geological storage licences for natural gas and long-term storage of carbon dioxide.

It was further noted that a company or licensee needs the written approval of the minister, to directly or indirectly assign any of the rights under a licence or petroleum agreement, whether in whole or in part, to a third party or an affiliate.

The minister would also have the power to require the licensee to market abroad on competitive terms all or part of the government’s share of crude oil subject to commercial terms established under the petroleum agreement.

The minister may even require the holders of a petroleum production licence to supply crude oil in the domestic market when the needs of the domestic market exceed the Government’s entitlement from all crude oil production in the country.

He may also exercise any other powers required for the management of petroleum resources and operations carried out under this Act.

Importantly, it is noted in the document that the minister may delegate any of the powers related to administration of petroleum resources and supervision and inspection of petroleum operations to a department, agency or government body under his administrative authority.

Kaieteur News understands that the minister may make regulations for the purpose of giving effect to provisions of the Act, and in particular, but without limiting the general power, may make regulations for the execution of all works related to exploration for and production of petroleum; conservation and prevention of the waste of petroleum or other natural resources; the form and contents of, and conditions with respect to, an application for the grant or renewal of licence; and the methods to be used for the measurement of petroleum, water and other substances from a well.

Regulations can also be implemented to address safety and welfare standards, and the health and safety of persons employed in or in connection with exploration, production or conveyance of petroleum, transportation, storage and treatment of petroleum via pipeline underground storage of natural gas, underground storage and transportation of carbon dioxide, and any other matter that may be, or is required to be, prescribed by the minister.

The Ministry of Natural Resources released on June 19, 2023 the Petroleum Activities Bill for a two week period for public consultation. It is expected to repeal and replace the Petroleum (Exploration and Production) Act Cap. 65:10.

The ministry explained in a statement that the Bill introduces significant improvements and safeguards related to safety, emergency response, cross border unitization, supervision and monitoring requirements and authorizes the minister to prescribe regulations about key administrative and operational aspects of exploration and production activities.

Further, the Bill expands the scope of the proposed Act to regulate storage and pipeline transportation aspects of the oil and gas sector and empower the government to regulate, in the future, activities associated with geological storage of carbon dioxide. Exploring opportunities for potential CO2 storage sites will also enable the government to develop petroleum resources while seeking to minimize their carbon and footprint, the ministry said.

The draft Bill is now available for public consultation feedback until Monday, July 3, 2023, at the following websites: www.nre.gov.gy and www.petroluem.gov.gy.

All comments should be sent via email to [email protected].

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• agency, department, develop, petroleum, resources

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