Guyana’s Vice President, Dr. Bharrat Jagdeo has clarified that the country’s Petroleum Activities Bill 2023 is solely intended to whet the administration’s regulatory teeth. It will not embody the fiscal regime for the industry. This he said would be outlined separately in the new model production sharing agreements being finalised.
During a recent engagement, the official made this distinction following commentary on the draft oil law by the country’s political opposition. Specifically, the opposition expressed that the bill fails to make way for royalties to be increased during times of high oil prices.
Jagdeo was keen to explain however that the royalty rate will be addressed in the PSAs being finalized to govern deepwater and shallow water concessions. The bill he stressed is designed with two key functions: strengthen the regulatory provisions and tools available to the government in a modern era and secondly, enhance the management of the sector. “The bill therefore equips the government with more modern tools for these two functions and replaces the old tools passed in the 1986 law. The fiscal regime is in the PSAs but the law gives a macro cover to these things,” the Vice President said.
Notably, the Petroleum Activities Bill introduces significant improvements and safeguards related to safety, emergency response, cross border unitisation, supervision and monitoring requirements, and authorises the minister to prescribe regulations about key administrative and operational aspects of exploration and production activities.
It also expands the scope of regulation to include storage and pipeline transportation aspects of the oil and gas sector and empowers the government to regulate activities associated with geological storage of carbon dioxide. Exploring opportunities for potential CO2 storage sites will also enable the government to develop petroleum resources while seeking to minimise its carbon footprint.
