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Seven years later: Guyana has no independent oil sector regulator

May 16, 2022 News  -- Source -- Kaieteur News Online -- https://www.kaieteurnewsonline...il-sector-regulator/

— Opposition mulls re-tabling old Petroleum Commission Bill
— as PPP/Govt. continues *****footing around issue

By Renay Sambach

Shadow Oil and Gas Minister, David Patterson

Kaieteur News – This month, makes seven years since Guyana is without an updated legislative and regulatory framework that is essential for the protection of the oil industry against mismanagement and corruption.

One of the key regulatory architecture that remains in limbo is the Petroleum Commission Bill that would pave the way for the appointment of an independent regulator. The Petroleum Commission Bill was initially proposed by the APNU+AFC for the establishment of an independent body which would hold responsibility for monitoring and enforcing Guyana’s modernised petroleum laws, policies and oil agreements. The body is also intended to ensure oil companies comply with health, safety and environmental standards.

On May 8, 2017, then Minister of Natural Resources, Raphael Trotman had tabled the Petroleum Commission of Guyana Bill 2017 during the 64th Sitting of the Eleventh Parliament. The passage of that Bill would have seen the creation of the Petroleum Commission of Guyana which will oversee and manage Guyana emerging oil and gas industry. The Petroleum Commission of Guyana will have the responsibility of monitoring and ensuring compliance with the policies, laws and agreements for petroleum operations.

It would have also, inter alia, be responsible for ensuring compliance with health, safety and environmental standards and ensure local content and local participation in all of the activities. Also, the commission would have been tasked inter alia, with researching efficient, safe, effective and environmentally responsible exploration, development and production of petroleum in Guyana, including the optimum methods of exploring for, extracting and utilising petroleum and petroleum products

The new regulatory body will also have an advisory role to the Minister on matters related to the conduct of the industry. The Bill was however sent to a Special Select Committee since its most fatal flaw or characteristic was that it gave the Natural Resources Minister a toxic level of control over the said body.

Upon assuming office in August 2020, the PPP administration had promised an overhaul for Guyana’s petroleum laws. In fact, President Dr. Irfaan Ali during his inauguration address pledged to establish a Petroleum Commission to insulate the oil and gas sector from political interference.

Also, both the Vice President, Bharrat Jagdeo and Natural Resources Minister, Vickram Bharrat have agreed that such a body is needed to ensure the sector is independently managed and kept away from political influence. In fact, in March 2021, Minister Bharrat had stated that within a matter of weeks, the independent regulator the government promised to establish for the oil sector would be in place.

President Dr. Irfaan Ali

Minister Bharrat was also quoted on the Guyana Basins Summit website as saying that the Commission is needed so it can “manage this emerging sector without political interference.”

Attorney General, Anil Nandlall, had told Kaieteur Radio during an interview with Guyana’s Oil & You hostess, Kiana Wilburg, that the Bill is at the Ministry of Natural Resources and it is being actively considered by a Legal Department within that Ministry. That was when the Attorney General cited that changes are likely to be seen. Since then, the government has not disclosed the progress made on this front.
However, it has been 21 months since the PPP/C Government assumed office and it has yet to honour its promise to the nation.

Cherry-picking
Notwithstanding the importance of the Petroleum Commission Bill, the government in the meantime has engaged in the cherry-picking of legislative reform to award itself sweeping powers over the country’s oil revenue. Kaieteur News had reported that the PPP/C Government had hurriedly passed the highly flawed Natural Resources Fund Act (NRF Act) in December 2021, which gives it total control over how the oil money is to be spent. The administration even amended a small part the nation’s 1986 oil law so as to ensure ExxonMobil has a smooth flow with lands to be used or disrupted during the construction of the gas-to-energy project and other initiatives.

As a result of the government not making any headway with the improvement of the Bill, much less its passage – Shadow Oil and Gas Minister, David Patterson in a recent interview with this publication disclosed that the Coalition is mulling to bring back the Petroleum Commission Bill of 2017. “…absolutely no interest anybody [government] has in the Petroleum Commission to carry through with the bill. They would like to continue unilaterally making decisions on the industry without any oversight, all they are interested in is getting their hands on the money,” Patterson stated.

He explained that the Coalition is duty bound to do something about it and as such will be considering bringing back the draft Petroleum Commission Bill.

According to him, the draft bill will either be tabled in either the next sitting of the National Assembly which ends in August or before the year ends. “We are monitoring the situation, there is a draft petroleum commission bill that was in the previous parliament, so we do have a draft and I’m saying that if the government does not bring it…we will be considering bringing up your draft for consideration whether the government accept it or not,” Patterson added.

Recently, during a press conference Jagdeo the Vice President once again acknowledged that an independent regulator for the oil and gas sector in the form of a Petroleum Commission is critical to any government’s regulatory architecture. However, he noted that the absence of such a body in Guyana does not mean that the sector is hanging from a dangerous precipice. In response to Jagdeo, Patterson stated that what the Vice President is peddling is “absolute hogwash.” He added too that the government is comfortable working in the unregulated manner in order to do whatever they please in the sector.

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