The Government of Guyana late Monday night released a draft Petroleum Activities Bill which will, if passed in the National Assembly, replace the 1986 Petroleum (Exploration and Production) Act.
With the release of this draft Bill, the government is seeking feedback from the public on how the Bill can be improved before it is taken to the National Assembly.
There are important updates in the draft Bill. First, there are stiff penalties for violations. For example, Section 10 of the draft Bill clearly says no government officials in their personal capacity or in the name of any family member can acquire, hold or attempt to acquire or hold a license, an interest in a license or interest in a corporate body that can become a license holder. If that happens, the officials can be fined $10 million and be subjected to one year imprisonment. The license received can also be revoked.
The draft Bill also expands on terms for exploration, development, production and abandonment. And if any provisions of the Act are violated, or there are any false statements made in relation to the provisions of the Act, an individual can be fined up to $30 million and/or be subjected to up to three years imprisonment. This heavy fine and imprisonment sentence is also applicable if any person reveals any confidential information as per the law.
Importantly, the new Bill- in Part XI- also proposes that the Minister may require the holders of petroleum production licences to supply crude oil in the domestic market when the needs of the domestic market exceed the government’s entitlement from all crude oil production
In such cases, the volume of crude oil which the licensee shall be required to sell under this section shall not exceed their share of profit oil entitlement under the petroleum agreement. If that is done, the minister shall give due notice to the licensee for the domestic supply obligation under the terms of the petroleum agreement
There are other notable additions to the law, dealing with revenues and financial guarantees also. For example, the 1986 law spoke extensively about royalties payable to the State. The 2023 Bill, however, details requirements for rental fees, a signing bonus, a retention fee and royalties. It also speaks about the licensees requirements to provide financial support for environmental and social projects.
The draft Bill can be found on the website of the Ministry of Natural Resources.
Click here to view the Bill.
