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Minister must obey all Cabinet directions on oil sector

Oct 11, 2023 ExxonMobil, News, Oil & Gas

Petroleum Activities Law Pt. 1

By Kiana Wilburg

Kaieteur News – The Petroleum Activities Law which was passed by Guyana’s Parliament on August 9, 2023 and replaces the 1986 framework, entrusts a number of powers into the hands of Natural Resources Minister, Vickram Bharrat.

Over the coming weeks, Kaieteur News will be informing industry stakeholders on the key provisions within this legislation and providing critical context where needed.

The legislation which received presidential assent on August 16, 2023 notes that the minister will have control over all activities within the oil sector.

According to the law, the minister will be in charge of the following:

  1. the licensing of petroleum exploration, development, production, transportation and storage operations, including the geological storage of carbon dioxide.
  2. the prescribing of subsidiary legislation and the issuing of such guidelines as may be necessary for effectively carrying out the purpose of this Act.
  3. coordinating and cooperating with relevant agencies of the State regarding the environmental and safely aspects of petroleum operations.
  4. the monitoring of the conduct of petroleum operations to ensure compliance with this Act, and the terms and conditions of a licence or permit granted, or a petroleum agreement entered into, under this Act and any other written law.
  5. directing persons and conducting petroleum operations to perform corrective actions where there is non­compliance with this Act, and the terms and conditions of a licence or permit granted, or petroleum agreement entered into, under this Act and any other written law and imposing sanctions for non-compliance with this Act.
  6. developing terms of reference and prescribing qualification criteria for the grant of a licence.
  7. giving licensees or holders of a permit directions as to any matter with respect to which regulations may be made tinder this Act.
  8. doing any and all things required by any direction given under section 17 and recovering such costs and expenses incurred for doing so in the same manner as revenues due to the State.
  9. directing that such studies and investigations, as the Minister deems fit, be done, and
  10. exercising any other powers required for the management of petroleum resources and operations carried out under this Act.

Importantly, the law states that the Minister, in the exercise of his powers, shall conform to any general or specific directions given by the Cabinet.

There are also three other caveats:

  1. The minister may, in relation to any particular matter or class of matters in the subsection above, delegate in writing to any public officer or agency of the state, any of the powers or duties of the Minister under this Act,
  2. Notwithstanding any delegation, the Minister may continue to exercise any power or perform any duty listed under the Act.
  3. Furthermore, any delegation and any act done in pursuance of that delegation, maybe made subject to review and variation by the Minister, and the decision given upon such review or variation shall be deemed to be that of the Minister
  4. Finally, the Minister may, at any time and in writing, revoke any delegation made under this section.

CONCLUSION

The Petroleum Activities Law of 2023 undoubtedly grants significant power and responsibilities to Guyana’s Natural Resources Minister, Vickram Bharrat. From licensing petroleum operations to overseeing environmental safety measures and setting qualification criteria for licenses, the Minister has broad oversight.

However, a central tenet of this legislation is the overarching guidance and direction that the Cabinet can provide. Despite the vast authorities vested in the Minister, he remains answerable to the broader governmental framework and is required to adhere to any specific or general directives issued by the Cabinet.

Moreover, while the Minister has the capability to delegate certain powers, he retains the ultimate decision-making capacity and the right to revoke any delegated powers.

This structure ensures checks and balances within the management of the crucial oil sector in Guyana, emphasizing both individual authority and collective governance.

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