The Department of Energy has contracted two law firms –one based in the United States and the other based in Guyana –to provide legal advice to the department and to “revise, replace and develop” laws to effectively govern the petroleum sector.
Among the laws to be revised is the Petroleum (Exploration and Production) Act.
The firms are Hunton Andrews Kurth LLP out of Virginia, United States and Cameron and Shepherd which boasted on its website to be the oldest law firm in Guyana.
Director of the Department of Energy Dr Mark Bynoe at a news conference on Tuesday said: “this consultancy is critical in the DE setting out conditions that will level the proverbial playing field, bring greater clarity and certainty to the sector’s operations with enhanced operational efficiencies.”
He revealed that the contract cost US$1.2M and is valid for one year.
The money is being paid from a US$20M World Bank loan which was secured in 2019 for capacity building for Petroleum Resources Governance and Management.
Included in the firms’ mandate is the development of legislation for the Environmental Protection Agency, the Guyana Revenue Authority, the Guyana National Bureau of Standards and other agencies dealing with the sector.
“They’re expected to look at all aspects of the petroleum industry, e.g. we’ve been clamouring for legislation around local content, we have no such legislation, all of those have to be developed. We’ve been clamouring for legislation for a modular refinery, we have nothing that governs downstream activities, we have nothing that governs midstream activities,” Dr Bynoe explained.
To improve its capacity, the Department of Energy has hired 21 persons, 14 of who are serving in technical capacities. The other seven are administrative personnel.
The Department of Energy contracted a Petroleum Development Management Specialist, a Natural Gas Specialist, a Crude Marketing Expert, an Oil and Gas Expert and a Legal Expert.
Dr Bynoe said the agency tasked with managing the country’s newfound wealth is still in negotiations with a Petroleum Accounting Specialist and Contract Administrating Specialist.
“With these skills in place, the Department of Energy is in a better position to reduce potential value leakage,” Dr Bynoe said.
With assistance from the IDB, the Department has completed a PSA process mapping manual, which it will then launch via an electronic platform for easier application and implementation.
With the assistance of the IDB, it has also completed its Functions Manual, Organizational structure, and budget and is now moving to implement some of the recommendations contained therein.
Oil production began in December 2019.
With a recoverable resource of 8 billion barrels of oil equivalent, the Liza 1 project on the Stabroek Block, offshore Guyana has produced 2.7 million barrels of oil to date.