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Pres. Ali assents to new Petroleum Law arming Minister of Natural Resources with command over sector
Kaieteur News – President Irfaan Ali has granted approval for the new Petroleum Activities Bill, passed in the National Assembly on August 10, 2023 to become Law.
The Head-of-State assented to the legislation on August 16, 2023; six days after the government Members of Parliament (MPs) used its majority in the House to pass the law. The Opposition MPs were in support of the Bill being sent to the Special Select Committee for further deliberations. It is important to note that the 30 amendments tabled by the Shadow Minister of Natural Resources, David Patterson were all thrown out.
The Opposition has said the new legislation in its current form is “deeply flawed” as it lacks adequate environmental safeguards and robust measures for revenue management and accountability among others. MP Deonarine Ramsaroop for instance, who seconded his colleague’s amendments, during his presentation pointed out that in the absence of rigid provisions to address potential oil spills, pollution, and its long-term impacts, Guyana risks irreversible damage to the environment and the livelihoods of countless Guyanese who depend on it.
The new legislation repeals the decades-old Petroleum (Exploration and Production) Act of 1986. It was released for a two weeks’ public comments period that commenced on June 20, 2023. A British firm, IHS Markit, a renowned international firm that specializes in critical information, analytics and expertise was hired by the government to provide consultancy services in drafting the new legislation.
President Ali has assented to the new oil law, grating the minister of Natural Resources sweeping powers over Guyana’s Petroleum sector.
The Petroleum Activities Act of 2023 features 18 Sections to govern the nation’s budding industry. It introduces significant improvements and safeguards related to safety, emergency response, cross border unitization, supervision and monitoring requirements and authorize the Minister to prescribe regulations about key administrative and operational aspects of exploration and production activities.
Notably, the Petroleum Activities Law vests the Natural Resources Minister, Vickram Bharrat with sweeping powers over the sector.
According to the legislation, 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. See more below:
The Petroleum Activities Bill is expected to be supplemented by a set of regulations that will follow in the coming months and provide the government the necessary toolbox for responsible and efficient management of the petroleum activities within the Guyanese economy.
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