Among the options Guyana should consider in preparation for its emerging oil and gas industry is the development of prescriptive and outcome-based frameworks, which, according to a consultant on regulation and standards in the industry, will outline clearly how things should be done and what the expectations are.
Peter Murphy, Director and co-founder of Noetic Group, has worked with governments to establish regulatory authorities for the offshore oil and gas industry in Australia and Timor-Leste.
OilNOW spoke with Murphy via telephone last week on a range of issues related to regulation and best practices in the oil and gas industry.
A prescriptive framework is intended to provide a clear outline of what measures are required and how they should be applied to ensure the best results. The outcome framework identifies what is expected at each step of the way. “This will specify the outcomes that are sought from the regime. In that regime, the company tells the regulator how they are going to manage the facility and make sure that it is done safely,” Murphy stated.
He pointed out that many countries around the world use a “hybrid model” which entails a combination of prescription and outcome measures and taking on board things that have worked in other countries such as Australia and Norway. This model he said, is one that could also work for Guyana.
“Looking at other countries that have entered the world economy recently would also be useful,” he said.
Based on his assessment, Murphy believes that a hybrid model will suit the Guyana context, especially since it is important for the country to get it right from the onset.
In addition to advising on regulatory framework, Murphy has assisted on safety strategy and its implementation for mining, and oil and gas companies in Australia, China and North America.
Being fairly new to the oil and gas sector, Guyana has welcomed and is receiving expert advice from several countries, organizations and individuals around the world.
The Government recently received assistance from the Inter- American Development Bank to develop a robust Fiscal Responsibility Framework to address the management of natural resources wealth.
The South American country has also received assistance and support from the Commonwealth Secretariat for the creation of a draft Sovereign Wealth Fund.
The United States, Canada and several other countries continue to play a pivotal role in Guyana’s preparation for first oil in mid-2020.