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Opposition submits several proposed amendments to draft oil law
– wants Petroleum Commission to oversee award of licences instead of minister
– calls for royalty to be as high as 15 percent
– urges cost recovery audits be completed in nine months
– demands provision of full liability coverage of oil spills
Shadow Oil Minister, David Patterson
Kaieteur News – Shadow Minister for the Oil and Gas Industry, David Patterson, on Tuesday submitted a number of proposed amendments to the Petroleum Activities Bill 2023 which is set to replace the nation’s 37-year-old oil law.
Patterson’s list of proposed amendments calls for the inclusion of a provision to establish a National Petroleum Commission, an independent body that would provide independent oversight for the sector, including the award of exploration and production licences, instead of the minister. Patterson’s also reasoned that the Bill should be armed with provisions that ensure there is technical input for this body.
Where the draft law caters for oil companies to make financial contributions to social projects, Patterson is arguing that this be reviewed by the Petroleum Commission after consultation with relevant groups. Patterson contended that such a body should also be allowed to develop a competitive financial grant system and report annually to the Public Accounts Committee on its operation.
Patterson’s check-list also raised concerns about provisions in the draft law that allow the minister, with Cabinet’s blessings, to award oil blocks, following direct negotiations with companies or countries. The parliamentarian is asking government to adjust this provision to include a requirement for the approval of the National Assembly before a licence is issued. He said a new clause to this effect can state: “the Minister shall bring to the National Assembly, for approval, a report on the conditions and terms of licence which is proposed to be granted” following those one-on-one discussions.
With respect to revenues, Patterson called for amendments to state that any signature bonus paid by the licensee shall be deposited in full into the consolidated fund in no less than 90 days after receipt and reported to the National Assembly at the end of the quarter that it is received.
He is also calling for royalty payable to the State by the holder of a petroleum production to be a minimum of 10 percent but capped at 15 percent.
With respect to audits, he said there should be the insertion of a clause which states that, ‘all audits for money deemed cost recoverable under any production licence shall be completed within nine months of the end of each fiscal year.’ He said the minister should also be made to submit all audit reports to the National Assembly at the earliest possible time thereafter.
Additionally, the Shadow Minister said the law should ensure oil companies have a strict separation between exploration and production activities, costs, and revenues, adding that the law should ensure no revenue from production activities can be charged to exploration activities.
On environmental matters, Patterson called for there to be a clause that demands the licensee to conduct prior to commencement of operations, and at their own expense, a comprehensive baseline study on the fishing stock within the proposed area. For additional coverage, he said another clause should state that the licensee shall conduct continuous monitoring during the lifetime of a licence, the results of such monitoring exercise shall be submitted to the Guyana Fisheries Department and the National Petroleum Commission.
Patterson also proposed that the licensee shall undertake to provide full liability coverage, inclusive of appropriate insurance and a parent company guarantee which shall be in force for each oil field development. He said certificates of insurance and this parent company guarantee should be lodged on an annual basis with the Environmental Protection Agency.
Patterson’s amendments were seconded by his colleague Deonarine Ramsaroop, and circulated by the Clerk of the National Assembly.
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