A review of Guyana’s 1986 Petroleum (Exploration and Production) Act is underway as the country moves to modify and modernize the document which is the basis for a number of Petroleum Agreements it has signed with oil companies exploring offshore.
This is according to Director of the Department of Energy, Dr. Mark Bynoe, speaking at a news conference on Monday at the Ministry of the Presidency in Georgetown.
“The 1986 act is not fit for purpose in 2019,” he said. One of the concerns he raised about this particular act is that “it is extremely silent on gas exploration.”
He said, “We do recognize that associated gas remains a significant discovery for Guyana going forward some of what should be in that primary act has made its way into the PSA’s and so what we are aiming for is for the primary legislation to be a bit more robust in areas such as local content as well as in the decommissioning of rigs.”
Further, in December last year, the best practice Production Sharing Template was completed and this will look at global best practices and how these can be incorporated into the Guyana context.
“We will have to look at what will be most contextually relevant for Guyana when the negotiation starts,” Dr. Bynoe pointed out.
He explained further that, “It will look at issues related to royalties; what would be the best practices for royalties, what maybe is the best practice in terms of occupational health and safety, so you vary those as you go along.”
He underscored that the ultimate goal of the South American country is to derive optimum benefits from its oil and gas resource, while at the same time attracting investments.
The Government of Guyana has been heavily criticized about its handling of the renegotiation of the Production Sharing Agreement with US oil company, ExxonMobil, back in 2016. While some contend that Guyana could have received a better deal, others believe that the current agreement is on par with deals which have been entered by comparative countries.