In a move to modernize the legal and regulatory framework governing the country’s petroleum sector, Guyana’s Ministry of Natural Resources has announced the release of the draft Petroleum Activities Bill 2023 for public consultation. This bill, which replaces the outdated Petroleum (Exploration and Production) Act of 1986, aims to introduce significant improvements and safeguards across various aspects of the industry.
According to the Ministry, the 2023 Petroleum Activities Bill addresses crucial areas such as safety, emergency response, cross-border unitisation, supervision and monitoring requirements. The bill also grants the Minister the authority to establish regulations concerning essential administrative and operational aspects of exploration and production activities. Notably, the scope of regulation has been expanded to encompass storage and pipeline transportation within the oil and gas sector, as well as activities associated with the geological storage of carbon dioxide.
The government also believes that exploring potential sites for carbon dioxide storage will allow for the development of petroleum resources while minimizing the industry’s carbon footprint. Referring to the Act, the Ministry said, “It empowers the government to regulate activities associated with the geological storage of carbon dioxide, enabling the development of petroleum resources while seeking to minimize their carbon footprint.” This strategic approach it said, aligns with global efforts to mitigate climate change and demonstrates Guyana’s commitment to sustainable development.
In addition to the Petroleum Activities Bill, the government announced that it will also release a set of regulations in the coming months, further enhancing the legal framework governing the petroleum sector. These regulations will complement the bill and enable the government to effectively manage and regulate petroleum activities within the Guyanese economy.
It is important to note that the government had previously said the changes to the old Petroleum Act are being made to support the fiscal and regulatory changes outlined in the draft new model production sharing agreements (PSAs), which are nearing completion. These updates are aimed at providing investors with a comprehensive package for the upcoming 2022 Licensing Round, Guyana’s maiden auction, which includes 14 blocks, comprising three deepwater blocks and 11 shallow water blocks being contested for.
To that end, the Ministry noted, “The government will also ensure that the terms of the draft petroleum agreements released in association with the first offshore licensing round are aligned with the provisions of the Petroleum Activities Bill.”
Over the years, the government has been actively working to improve the overall management and regulation of Guyana’s petroleum industry through various policy and legislative initiatives. Notable efforts include enacting the 2021 Local Content Act, implementing the Natural Resource Fund (NRF) law to enhance oversight and revenue management, the two draft new model PSAs and now this bill.
The draft Petroleum Activities Bill will be available for public feedback for a period of two weeks, commencing from Tuesday, June 20th, to Monday, July 3, 2023.
It can be found at: [https://petroleum.gov.gy/sites/default/files/2023-06/Petroleum Act Preliminary Draft – updated_1.pdf](https://petroleum.gov.gy/sites/default/files/2023-06/Petroleum%20Act%20Preliminary%20Draft%20-%20updated_1.pdf “”)
