Sunday, June 26, 2022

Guyana government moving to strengthen private proprietary interests related to land under Petroleum Act

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Guyana’s Minister of Natural Resources, Vickram Bharrat, will introduce and provide first reading of the ‘Petroleum (Exploration and Production) (Amendment) Bill 2021’ in the National Assembly on August 3.

The Bill seeks to amend section 52 of the Petroleum (Exploration and Production) Act, Cap. 65:04. The amendment inserts a proviso to subsection (l)(b) (i) and (ii) to exempt State land, Government land, land wholly owned by State entities or in which the controlling interest is vested in the State and any land identified by law or on a plan for reserves from the restriction of section 52(1) (b).

According to an explanatory memorandum from the natural resources minister, the Bill also seeks to amend section 52 by inserting new subsections (2A) and (2B). Subsection (2A) provides that the Minister may obtain written consent from any landowner or lawful occupier of private land. Currently, only a licensee may obtain written consent from the lawful occupier of private land.

Subsection (2B) provides that a licensee may land, install, or operate any pipelines or submarine, fibre optic or terrestrial cables or similar infrastructure. These infrastructural activities may only be done on State land, Government land, land wholly owned by State entities or in which the controlling interest is vested in the State and any land identified by law or on a plan drawn and approved in accordance with any law for reserves. This is necessary as the Principal Act is premised on onshore development with all of its accompanying heavy infrastructural works.

Consequently, subsection (2) was also amended to provide that any instrument of consent obtained under subsection (l)(b) or subsection (2A) may be given unconditionally or subject to such conditions as are specified in that instrument.

“Overall, the amendment of section 52 ensures that the Government has oversight over the exercise of the licensee’s rights over private land. Accordingly, the amendment further strengthens and protects private proprietary interests as enshrined in Article 142 of the Constitution of Guyana,” Mr. Bharrat said.

The amendment being sought comes at a time when plans are underway for a US$900 million gas-to-energy project that will see a pipeline and other infrastructure being set up on lands west of the Demerara River.

The project includes the construction and operation of a pipeline from the Liza Phase 1 and 2 Floating, Production, Storage, and Offloading (FPSO) vessels to an onshore natural gas liquids (NGL) and natural gas processing plant (NGL Plant) located approximately 23 km upriver on the west bank of the Demerara River. The pipeline will transport up to approximately 50 million standard cubic feet per day (MSCFD) of dry gas to the NGL Plant.

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