The new draft Petroleum Activities Bill released this week by Guyana’s Ministry of Natural Resources contains stringent measures which seek to block government officials and their family members from owning a petroleum license.
Under ‘Prohibition against holding a licence’ the proposed law states that, “No government official shall, in his or her personal capacity, and in his or her name or in the name of any family member, acquire, hold or attempt to acquire or hold a licence or an interest in a licence…”
The proposed legislation also seeks to block them from having a share in a body corporate tasked with carrying out petroleum exploration, production, storage and pipeline transportation operations in the South American country. The Bill defines body corporate as a company or a corporation.
Penalties
Any government official or their family member that attempts to contravene this clause shall, on summary conviction, be liable to a fine of ten million dollars and imprisonment for one year. Any licence, interest in a licence or share in a body corporate acquired shall also be forfeited to the State.
Prosecution
Under prosecution for violation of the law, the proposed legislation states that it shall be sufficient defence if the accused person proves that the licence, interest in licence or share was acquired by operation of law and that as soon as is possible after this was acquired it was disposed of, or all reasonable steps necessary to dispose of it have been and are continuing to be taken.
Additionally, it shall be sufficient defence if the accused person proves that the licence, interest in licence or share was acquired before they became a government official or before the body corporate became entitled under the law to carry on petroleum exploration, production, storage and pipeline transportation operations in Guyana. The defendant must also prove that as soon as possible after they became a government official or after the body corporate became so entitled, the licence, interest in licence or share has been disposed of or all reasonable steps are being taken to do so.
Guyana is currently holding a bid round for 14 oil blocks in the shallow and deep waters off of its coast. Interest in ownership is at an all-time high, propelled by more than 11 billion barrels of oil equivalent resources discovered by ExxonMobil since 2015 in an area called the Stabroek Block.
The country achieved first oil in 2019 and is on course to become one of the biggest producers in the region by the end of the decade.
The public consultation phase for the draft Petroleum Activities Bill will span two weeks, commencing June 20 and concluding on July 3.
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