Shadow Minister for the Oil and Gas Sector, David Patterson, has proposed a number of amendments to the Petroleum Activities Bill 2023, set to replace the country’s nearly four-decade-old oil law. These changes he believes, would ensure there are greater mechanisms to ensure transparency, fiscal responsibility, and environmental safeguards.
Central to his proposal is a provision for the establishment of a National Petroleum Commission, intended to offer technical oversight to the oil and gas sector. Patterson asserts that all petroleum exploration licence applications should be reviewed by this body, with their recommendations then being forwarded to the Minister for further deliberations.
Voicing concerns over direct negotiations for oil blocks in the proposed law, Patterson is pushing for the National Assembly’s approval before a licence is granted in this manner.
Patterson’s propositions also set clear benchmarks for royalties: a minimum of 10 percent but capped at 15 percent. Audit transparency is another area of focus, as he offered an amendment for a nine-month deadline for cost-recovery audits under any production licence.
In a move to ensure cost integrity, Patterson stressed the importance of separating exploration and production costs and revenues. He underscored the need for provisions to prevent oil companies from charging production revenues to exploration costs, thereby advocating for costs to be clearly delineated.
Environmental responsibility also features prominently in his list of amendments. In this regard, he recommended provisions for there to be mandatory comprehensive baseline studies on fishing stock within proposed operational areas, funded by the licensee. Continuous monitoring and public reporting of results to the Guyana Fisheries Department and the National Petroleum Commission are also highlighted in his list of amendments.
To bolster environmental safeguards, Patterson insists that there be clear provisions binding licensees to provide comprehensive liability coverage, encompassing both suitable insurance and a parent company guarantee. These credentials he said could be annually updated with the Environmental Protection Agency.
Patterson’s proposed amendments, endorsed by colleague Deonarine Ramsaroop, are now with the Clerk of the National Assembly awaiting further deliberation tomorrow.