NEW OIL POLICIES COMING

Jan 27, 2023 News

…Along with more audits, robust regulations, strengthening of technical skills for contract negotiation in 2023 – Min. Vickram Bharrat

By Kiana Wilburg

Kaieteur News – The Ministry of Natural Resources will be pursuing a suite of activities for 2023, all in an effort to ensure better management of Guyana’s oil resources. According to Natural Resources Minister, Vickram Bharrat, some of these works will include the implementation of an Upstream Oil and Gas Policy and Strategy.

This document is premised on a broad objective of attracting and securing investments in upstream exploration activity, and effectively outlining how the industry is to be regulated to ensure sustainable economic development.

Natural Resources Minister, Vickram Bharrat

The policy is also regarded as crucial since it is expected to address the full spectrum of exploration, development, production and decommissioning of oil and gas resources. It is also needed to establish a firm basis for putting in place the necessary legislation, regulations and other aspects of the institutional framework required for the efficient development of the sector.

Additionally, the policy is supposed to provide guidance on the transparent and effective upstream oil and gas legislative and institutional changes needed for Guyana; outline the pathway for modernizing the licensing and contractual regime oil and gas operations in Guyana; develop and standardize a transparent fiscal regime for upstream oil and gas operations which attracts investment and generates revenue for the country; and establish measurable initiatives to improve transparency and accountability.

Work on the Upstream Oil and Gas Policy began in 2012 and was finalised and approved in the third quarter of 2014 by the Donald Ramotar administration. The Commonwealth Secretariat provided assistance, from the inception, for the document which was launched in January 2015, mere months before the General and Regional Elections were held in May that year. The policy saw further work after the discovery of oil was announced and the David Granger administration assumed office in 2015 too.

In addition to this policy, Bharrat said 2023 will see the enhancement of the nation’s regulatory framework with modern legislation and the identification and utilization of scholarship opportunities to build local content capacity in the sector.

His 2023 to-do-list also entails the development of technical skills in contract negotiations along with improved fiscal policies. He said too that government will endeavour to encourage more exploratory seismic studies within the Guyana Basin.

The foregoing falls under the government’s programme to promote and support the exploration, development, and production of petroleum resources by regulating and managing the industry to ensure that the resources are developed in an economically viable manner. Towards this end, Bharrat said the ministry is expected to receive a financial commitment to the tune of GY$ 1.09B which will cover re-current and capital expenditures.

Kaieteur News understands that the ministry will also seek to develop and implement guiding policies for the petroleum sector with a focus on the rate of extraction and the proper abandonment of wells.

Furthermore, he said stakeholders can look forward to there being more sensitization outreaches on oil and gas-related topics and the continued support for the Local Content Secretariat.

Significantly, he said that there will be the completion of at least one cost recovery audit this year. It should be noted that there are two outstanding audit reports: one for the audit of ExxonMobil’s US$460M pre-contract costs and the audit its US$7.3B bills for the period 2018 to 2020.

Bharrat was also keen to note that the ministry has developed its Strategic Plan for the period 2021 – 2026. This document focuses on the interrelationships of trends in the expansion of natural resources sectors, new emerging sectors, and changes in environmental and social conditions.

Kaieteur News understands that the Strategic Plan for the period 2021-2026 has been guided by cornerstone initiatives such as the Low Carbon Development Strategy 2030 (LCDS) and the Sustainable Development Goals (SDGs) that allow the ministry and its sector agencies to successfully execute their mandates.

• audits, Natural Resources Minister, robust regulations, strengthening, Vickram Bharrat