National Assembly enacts Petroleum Activities Bill

-A milestone for prudent, sustainable petroleum sector management

The Ministry of Natural Resources is excited to announce the passage of the landmark Petroleum Activities Bill by the National Assembly in the early hours of Thursday morning. This momentous development heralds a new era for the nation’s petroleum sector, characterized by modernized regulations and transparent governance. The new legislation repeals and replaces the outdated Petroleum Exploration and Production Act of 1986, positioning Guyana on the path of responsible, accountable and modern petroleum management.

A key highlight of the new Act is the provision for cross-border unitisation. This innovative measure empowers the minister with responsibility for petroleum, following consultation with the Cabinet, to engage in constructive discussions with neighbouring states regarding petroleum reservoirs that extend into their territories. This collaborative approach ensures the efficient and equitable development of shared petroleum resources while strengthening diplomatic ties.

With a strong commitment to environmental protection, the Act also introduces the provision for licensees to apply for a geological storage license for carbon dioxide. This forward-thinking inclusion empowers licensees to explore potential carbon dioxide storage sites specified in their licenses, develop underground storage facilities, and undertake operations incidental to carbon dioxide storage. This vital addition is a significant stride towards sustainable energy practices that address climate change concerns.

In alignment with the principles of transparency and accountability upheld by the People’s Progressive Party/ Civic (PPP/C) government, the legislation prohibits government officials, members of parliament, and their family members from acquiring or holding any legal, equitable, or beneficial interest in a petroleum license granted under the new Act. This prohibition is a crucial step towards preventing conflicts of interest and fostering a level playing field for all stakeholders.

During the Bill’s deliberations, a document which was passed in full, Minister of Natural Resources Hon. Vickram Bharrat M.P., remarked, “This Bill underwent rigorous consultations since we took office in August of 2020. A robust regulatory framework is essential to ensure the prudent and sustainable management of our country’s petroleum sector. The Petroleum Activities Bill, a modern piece of legislation, is a testament to our commitment to judiciously manage the sector for the benefit of this generation and the generations to come, and is entirely in alignment with good governance mechanisms outlined in the PPP/C’s manifesto.”

Importantly too, this new legislation will synergize with the 2022 Guyana Licensing Round, which offers 14 oil blocks for an open and competitive auction, and which continues to garner substantial regional and global interest, underscoring Guyana’s emergence as a key player in the international petroleum arena. The accompanying model Production Sharing Agreements (PSA), documents that were publicly published earlier this year, will feature enhanced fiscal terms that strike a balance between government revenue and contractor interests. This approach retains Guyana’s competitive edge while promoting fair revenue sharing.

The passage of the Petroleum Activities Bill marks a defining moment in Guyana’s journey towards a responsible and sustainable petroleum sector. The Ministry of Natural Resources extends its gratitude to all stakeholders for their collaboration and support in crafting a legislative framework that aligns with international best practices and local aspirations.