Latest update July 1st, 2024 12:59 AM
Jun 29, 2023 ExxonMobil, News, Oil & Gas
Kaieteur News – Vice President Bharrat Jagdeo is comfortable with the range of powers bestowed on the Minister of Natural Resources instead of an independent Petroleum Commission in the draft Petroleum Activities Bill, which sets out to modernise the regulatory framework for Guyana’s burgeoning oil sector.
During his most recent press conference, hosted at the Office of the President, the Vice President was asked to explain why the draft law grants so many powers to the Minister rather than an independent Petroleum Commission, which is still to be established, almost four years since oil production activities commenced in the country. This body would be tasked with the direct management of the oil and gas sector and is supposed to play a key role in the accumulation, use and dissemination of oil and gas information and advise Government on the sector. Most importantly, the Commission is supposed to be a central body for the oil and gas sector, and independent in the execution of its functions.
In its drive to ramp up production activities, it seems such a body would only function as a humbug to the development plan of the People’s Progressive Party. In its draft oil law, the government has proposed allowing the Minister to control the sector, rather than an independent commission.
The draft Bill was released for a two-week public consultation on June 19, 2023. According to the document, the minister shall be empowered to administer the licensing of petroleum exploration, production, storage and transportation operations- including to 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.
These are just a few of the powers the draft law proposes for the Minister to possess.
In an invited comment on the issue, Jagdeo said that while the Commission is still to be set up, the Minister has been given the powers to manage the industry. It must be noted that the task of establishing the Commission is ultimately a role for government; meaning if it intended to put this body in place, it could have done this or at least commence the process for the Commission to be set up.
In the meantime, the Vice President said, “The Commission is not in place so you have to give the powers to the Minster…so the minister has the powers and the Minister can delegate these powers. So under the law, the Minister can delegate the powers to technical bodies.”
Jagdeo said the Commission is still on the cards but did not indicate how soon this independent regulator could be expected.
It is noted in the draft oil law 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.
Citizens can send their suggestions or comments on the proposed legislation to the Permanent Secretary of the Ministry of Natural Resources, Mr. Joslyn McKenzie at [email protected].
The draft Bill is available at the following websites: www.nre.gov.gy and www.petroluem.gov.gy.The public consultation period will close on Monday, July 3, 2023.
It was reported that Jagdeo had acknowledged that an independent regulator for the oil and gas sector, that being the Petroleum Commission, is critical to any Government’s regulatory architecture, but had said too that the absence of such a body in Guyana does not mean that the sector is in danger. He said too that the establishment or presence of the Commission was not “a safeguard” against corruption and that it simply ensures that all payments for the sector are properly accounted for, that key financial documents are not hidden and licences that are awarded are made public something he said the Government already does.
The 2017 Petroleum Commission Bill which was tabled in the last Parliament by the former A Partnership for National Unity + Alliance For Change (APNU+AFC) government ahead of a no confidence motion, sets out to provide an added arm of oversight, especially as it regards spending by oil companies.
The Bill states that, “The function of the Commission is to monitor and regulate the efficient, safe, effective and environmentally responsible exploration, development and production of petroleum in Guyana.”
In doing so, the Commission, among other things shall, “ensure well planned, well executed and cost-efficient petroleum operation for the achievement of optimal levels of petroleum extraction…” In the execution of its functions, the Commission is also mandated to, “review and approve budgets submitted by the operators”; “participate in the measurement of petroleum to allow for estimation and assessment of royalty and profit oil and gas due to the State” and be responsible for the approval of the exercise. After the assessment, the agency will “ascertain the cost oil or gas due to the operators”. It will also “provide necessary information to the relevant authority for the collection of taxes and fees from petroleum operations.” Additionally, the Petroleum Commission has the important cost oversight mandate to, “monitor operators and their trade practices to ensure that competition and fair practice is maintained.”
Let’s fight that snake Exxon!!!
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