The Petroleum Commission, an important component of managing Guyana’s oil and gas sector, is yet to be operationalised despite oil being discovered since 2015.
But President Dr Irfaan Ali recently assured that the process towards setting up this Commission is ongoing at a “rapid pace”.
The Petroleum Commission Bill was initially tabled back in 2017 by the then Natural Resources Minister Raphael Trotman during the 11th Parliament. It was to be taken to a Special Select Committee at a later sitting after its second reading. However, it was yet to be passed when the current Government took office.
After taking office in August 2020, the new government embarked on an initiative to make several amendments to the Bill.
The Bill is yet to be re-tabled in the National Assembly.
During a recent press conference, the Head of State was asked about the challenges government may be facing which may be contributing to the delay in setting up the Petroleum Commission.
“There’s complexity of what is needed…the new Bill has to be very comprehensive; it has to take a lot of new circumstances into consideration. It is very important that every stakeholder and every group is taken on board so that the bill will be one that is responsive of the whole national view that surrounds the sector itself.”
Nevertheless, President Ali assured that works are ongoing and government intends to fulfil its campaign promise of setting up the Petroleum Commission.
“I’m very sure and I’m very confident that that process is ongoing at a rapid pace now,” he added.
The Petroleum Commission Bill provides for the establishment and functioning of the Petroleum Commission which is intended to become the primary entity governing the oil and gas industry.
Since taking office however, the government has passed the National Resource Fund Bill and established the Natural Resource Fund Board – which has oversight on the country’s oil monies. In keeping with his powers under the Natural Resource Fund (NRF) Act 2021, President Ali had appointed five persons to the NRF Board, including Major General (Retired) Joe Singh, who will chair.
The government has also updated the 1986 Petroleum Act with the draft Petroleum Activities Bill which is slated to be tabled in the National Assembly soon. This piece of legislation aims to improve existing laws governing safety, emergency responses, and other oil and gas-related issues.
Government has also updated the Production Sharing Agreement (PSA), which will ultimately see the State’s take rising to over 60 per cent of the current revenue share.
Under the new conditions of the model PSA, Guyana stands to benefit from as high as US$20 million signature bonuses for the deep-water blocks and US$10 million for the shallow-water blocks. Additionally, all future PSAs would also include the retention of the 50-50 profit-sharing after cost recovery; the increase of the royalty from a mere two per cent to a fixed rate of 10 per cent; the imposition of a 10 per cent corporate tax, and the lowering of the cost recovery ceiling to 65 per cent, from 75 per cent.
Government had also pushed to have in place Local Content legislation, which paved the way for the establishment of the Local Content Secretariat, which has been in operation for over a year now.
