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New Oil Law gives companies power to protect any threats against them
Kaieteur News – The Petroleum Activities Act 2023 now requires all holders of petroleum licenses to implement and maintain measures to protect the oil and gas operations from threats and attacks.
The Law, passed in the National Assembly on August 9, 2023 and assented to by President Dr. Irfaan Ali on August 16, 2023, under Part XIII ‘Safety, Security and Emergency Response’ states that a licensee shall ensure risks inherent in petroleum operations are eliminated or are kept as low as reasonably practicable.
In Section 77 (1) the law makes it explicit, “The operator of a licence holder’s petroleum facilities and infrastructure shall implement and maintain- (a) preventative security measures designed to protect facilities and wells from threats and attacks; and (b) contingency plans to deal with the occurrence of any such attacks.”
The Petroleum Activities Act explains that the security measures shall include measures to control the presence of personnel, equipment and goods at a facility or well.
The Petroleum Activities Act was updated by government to modernize and replace the previous legislation that was established in 1986, decades before Guyana became an oil producing state and long before petroleum was discovered by ExxonMobil in the Stabroek Block.
The New Law introduces significant improvements and safeguards related to safety, emergency response, cross-border unitization, supervision, and monitoring requirements. It also authorises the Minister with Responsibility for Petroleum to prescribe regulations regarding critical administrative and operational aspects of exploration and production activities.
The requirement, for petroleum companies to ensure facilities and wells are protected from threats and attacks, is a new feature of the legislation.
It comes amid tensions between Guyana and Venezuela over the border controversy that was long settled since 1899. Venezuela’s President, Nicolas Maduro had ramped up the country’s claims over Guyana’s mineral rich Essequibo Region last year as his country prepares for national elections.
With the matter still before the World Court, Venezuela issued a new map to its people on December 2, 2023 which shows the Essequibo region being part of the Venezuelan territory.
Another of the president’s mandates was the instruction to PDVSA and the Venezuelan Corporation of Guayana to create the Essequibo Commission, and proceed to grant licenses for oil, gas and mining exploration. Companies operating in the territory were instructed to leave within three months.
On December 14, 2023, Guyana’s President, Dr. Irfaan Ali met with President Maduro in St. Vincent and the Grenadines, where both leaders agreed to, among other things, scale back on acts of aggression.
They specifically agreed that both States will refrain, whether by words or deeds, from escalating any conflict or disagreement arising from any controversy between them.
Be that as it may, Venezuela only on Thursday approved the creation of a new state in Guyana’s Essequibo.
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