Oil and gas development projects proceed with two key approvals: environmental permits and production licenses. They cover different aspects of a project and serve distinct legal purposes.
Environmental permits cover the expected environmental and social impacts of operations. Production licenses give companies the legal right to explore for and produce oil and/or gas in a defined area. These approvals are standard across oil-producing regions, including offshore and onshore basins in Africa, Europe, North America, and South America, including Guyana.
An environmental permit is issued by an environmental authority and sets conditions for how operations must be carried out. This includes limits on emissions, rules for waste management, monitoring requirements, and regular reporting to reduce harm to air, water, ecosystems, and communities.
How Guyana applies its environmental stewardship to offshore oil risk management | OilNOW
A production license is issued by a government or petroleum authority. It defines where a company can operate and outlines its rights to extract the resource.
In Guyana, contractors must secure a petroleum license from the Ministry of Natural Resources and obtain an environmental permit from the Environmental Protection Agency (EPA) before moving ahead with offshore development activities. The distinction is critical: a project can hold rights to a resource, but without environmental approval, it cannot proceed.
Oil development in the Stabroek Block is governed by a production sharing agreement (PSA) signed in 2016, which is given legal footing by the Petroleum Activities Act and sets the terms for exploration and production across the breadth of the asset.
ExxonMobil holds a 45% interest in Guyana’s Stabroek Block. Hess holds 30%, while CNOOC holds 25%. The prolific asset holds 11 billion barrels of oil-equivalent resources, which have formed the basis of growing oil production, currently exceeding 900,000 barrels per day.
