Guyana must be predictable, non-capricious with oil companies, says Jagdeo

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Vice President Bharrat Jagdeo of Guyana talked about the necessity for the government to maintain a predictable and non-capricious approach towards international oil companies to ensure the success of the country’s oil and gas industry. He said it is useful to have a clear regulatory and incentive framework to support industry growth.

“We pride ourselves in being predictable, fair, and working with the companies in partnership but looking out for national interests,” Jagdeo stated. He pointed to the government’s legislative efforts, including the passage of the Local Content Act and the new Petroleum Activities Act, as measures designed to enhance the industry’s management and ensure fair resource distribution and sustainable investment in the country.

The current administration took office in 2020. Like its predecessor, it has rejected calls to renegotiate the Production Sharing Agreement in place with ExxonMobil. In response to this, the government has often discussed the importance of sanctity of contract and fostering a stable investment climate.

“I think the industry appreciates… predictability and non-capricious behavior. And so, they have a clear direction as to how we operate,” Jagdeo said. 

The government is supportive of the acceleration of exploration and development of the country’s oil and gas resources. However, Jagdeo stressed the importance of sustainable development, even as oil companies are given the tools to succeed.

“But in succeeding, there are some imperatives that we have to observe, which is that this industry has to deliver in a fair manner, resources; there has to be investment back in the country,” the Vice President pointed out. “And secondly, everything has to be sustainable. They have to do it in a[n] environmentally safe manner.” 

The Vice President’s comments come at a time when Guyana’s oil and gas sector is witnessing rapid development, with Exxon’s discovery of 11 billion oil-equivalent barrels and production levels increasing at an unprecedented rate. With three oil projects already in operation and three more expected to come online in the coming years, Guyana’s oil production is set to exceed 1.3 million barrels per day by 2027

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