More amendments to be made soon to Petroleum Act – VP

…as Govt seeks to strengthen regulation of oil sector

With the Government having passed the Petroleum (Exploration and Production) (Amendment) Act 2021 in the National Assembly last year, Vice President Bharrat Jagdeo has said that more changes to the Petroleum (Exploration and Production) Act will be forthcoming soon.

Vice President Bharrat Jagdeo

According to the Vice President recently, the Government has an obligation not only to ensure the rapid development of the oil and gas sector, but to also ensure that the regulatory environment keeps pace with that development.
“We have to ensure that the oil and gas industry meets its obligations. We promised also, when in Opposition, we said we will find that balance. And so, since we’ve been in office, we’ve been creating the conditions to ensure that the country can better regulate the sector, manage these resources and get progressively a greater share of the benefits flowing to Guyana and to Guyanese.”
“Therefore, we promised that we are going to strengthen our capabilities to manage the industry. We have a process through which the Ministry is being strengthened. Secondly, we’re working on the Petroleum Act of 1986. That will change soon,” Jagdeo explained.
Other activities the Government is engaged in is creating a model Production Sharing Agreement, which will ensure that no new agreements are signed with similar flaws to the 2016 agreement the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government signed into law.
“We promised local content legislation in Opposition. And we passed it last year. And many of our people are already benefitting from this. And in the consultations, we promised to tackle two issues, which we have already embarked upon,” he said, noting that those issues include ensuring sub-contractors get payments in a timely manner and better payment terms.
The Petroleum (Exploration and Production) (Amendment) Bill 2021 was brought to the National Assembly in August of last year to amend Section 52 of the principal act. This section deals with land use.
It specifically targets work done by a petroleum licensee in furtherance of its operations on State land, Government land, or land that is otherwise controlled or under the management of the Government of Guyana.
Based on the amendment, the Minister would have the power to grant permission to the licensee to land, install or operate any pipeline, fibre optic cable or similar infrastructure on or through the said land.
It also empowers the Minister to order the licensee to maintain, inspect, repair or renew such infrastructure. The amendments also speak to the granting of consent to the Minister and a petroleum licensee for use of land by the private owners or lawful occupiers of said land in aid of petroleum operations.
Prior to the amendment being passed, the Government had issued an order to compulsorily acquire land that would be used to build the US$900 million gas-to-shore project and lay the gas pipeline from Nouvelle Flanders on the West Coast of Demerara (WCD) to Canal Number One Public Road on the West Bank thereof.
The gas-to-shore project, which has a 25-year lifespan, is expected to employ up to 800 workers during the peak construction stage, as well as some 40 full-time workers during the operations stage, and another 50 workers during the decommissioning stage.
It features approximately 220 kilometres of a subsea pipeline offshore that will run from the Destiny and Unity Floating, Production, Storage and Offloading (FPSO) vessels in the Stabroek Block to onshore. Upon landing on the West Coast Demerara shore, the pipeline will continue approximately 25 kilometres to the NGL plant at Wales, West Bank Demerara.
The pipeline will be 12 inches and is expected to transport some 50 million standard cubic feet per day (mmscfd) of dry gas to the NGL plant but has the capacity to push as much 120 mmscfd.
The pipeline’s route onshore will follow the same path with the fibre optic cables and will terminate at Hermitage, part of the Wales Development Zone (WDZ) which will house the gas-to-shore project.
The Guyana Government has already invited interested parties to make investments in the Wales Development Zone, which will be heavily industrialised and for which approximately 150 acres of land has been allocated. Those lands were previously used by the Wales Sugar Estate.
Additionally, it has gone out to tender for an international firm to manage the construction phase of the integrated Natural Gas Liquid (NGL) plant and the 300 MW power plant, all part of the project. Additionally, Requests for Proposals (RFPs) have been issued to the companies that were prequalified. Those proposals are expected soon. (G3)