Vice President, Dr. Bharrat Jagdeo has clarified that the political opposition, and citizens by extension, ought not to expect matters such as royalty to be addressed in detail in the Petroleum Activities Bill, but rather, in the Production Sharing Agreements (PSAs) being finalized for shallow and deepwater concessions.
Recently, the opposition issued a statement with its initial comments on the Bill. It listed eight points of contention, including one which underscored that the Bill does not have any provision for increasing royalty rates in situations where oil companies have benefited from high oil prices. To this, it was said, “Such thinking should be included in the Act, without unduly jeopardizing the predictability of the investment climate or fiscal regime. Legislation should make provisions for a price-based, pre-set sliding or variable royalty rate, such as what obtains in the local gold industry.”
In retort, Jagdeo said that he is aware of the opposition’s comments about royalty rates not being provided for in the Petroleum Activities Bill, adding that royalty rates are addressed in the new PSA.
The Vice President went on to explain that the Bill is intended for two purposes: regulation and management of the oil sector. “The Petroleum Activities Bill is designed to look at two functions basically, to strengthen the regulatory provisions, the regulatory tools that are available to the Government of Guyana in a modern era and secondly to enhance the management of the sector,” the Vice President added.
Moreover, Jagdeo highlighted that the Petroleum Activities Bill is to replace and update the provisions of the Petroleum (Exploration and Production) Act of 1986.
“It (Petroleum Activities Bill) does not address the fiscal regime, the fiscal regime is in the PSA, but it gives a macro cover to all of these things, so they are running saying, ‘oh it didn’t address this…’ but that has been addressed elsewhere and it has been dealt with,” the Vice President added.