The planet is on fire and our window of escape is getting harder and harder to reach the longer we wait to act. Ministers here in Madrid must strengthen the final decision text, to respond to the mounting impacts of climate change that are devastating both communities and ecosystems all over the world.
Alden Meyer – Union of Concerned Scientists
Appearing in a metal cage in the courtroom in Khartoum, ousted Sudanese dictator, Omar al Bashir, has been convicted and sentenced to two years in a correction facility for corruption and illegal possession of foreign currency. Sudanese law requires any person over the age of 70 to be sent to such a facility instead of prison. Mr. al Bashir is 75 years old. He is alleged to have received US$25 million in cash from Saudi Crown Prince Mohammed bin Salman and is yet to face trial for other charges levelled against him, including his alleged involvement in the 1989 coup that brought him to power.
A letter writer in the Kaieteur News asserted that there is no need for the President to dissolve Parliament ‘as a result of the non-extension of its life by a two-thirds vote as required by the Constitution, for such extended period as determined by the National Assembly’. The person was referring to the date of 18 September 2019, the end of the three months after the CCJ ruling that the 21 December 2018 vote of no confidence in the Government has been validly carried out. Article 106(7), however, refers to the date for elections and not for the dissolution of Parliament. For the latter, we need to go to Article 61 which states that ‘[a]n election of members of the National Assembly shall be held on such day within three months after every dissolution of Parliament as the President shall appoint by proclamation…’
The President has proclaimed 2 March 2020 as the date for elections but is yet to dissolve Parliament. The seats of the National Assembly, however, need to be vacated before 10 January 2020 which is Nomination Day. We trust that the President will bring the life of Parliament to an end before year-end since no useful purpose will be served by keeping it open beyond this date. There is no approved budget for 2020, and by extension, there can be no Supplementary Estimates for GECOM and/or any other government agency, as discussed in a previous article. That apart, it is a constitutional requirement for Parliament to be dissolved before the holding of National and Regional Elections. Transparency Institute Guyana Inc. has argued that the 2016 Petroleum Agreement between ExxonMobil’s subsidiaries and the Government of Guyana breached the Procurement Act. Stabroek News had requested our comments, and we expressed the view that the Act is not applicable for three reasons. First, there is a specific legislation in the form of the Petroleum (Exploration and Production) Act 1986 dealing with petroleum exploration and production in the same way that the Mining Act 1989 and the Forests Act 2009 regulate mining operations, and the granting of State forest exploration permits and concessions, respectively. Second, the Exploration Agreement with Exxon, out of which the 2016 Petroleum Agreement was entered into, dates back to 1999 whereas the Procurement Act came into effect in 2003. Finally, the granting of licences to exploit our natural resources in exchange for an annual rental fee, royalty and profit-sharing, is different from the acquisition of goods, services and the execution of works for which the Procurement Act applies. Our view on the matter, which coincides with that of the Public Procurement Commission, should in no way be interpreted as lack of support for transparency and competitiveness in the granting of petroleum exploration and production licences.
In today’s article, we outline the key provisions of the Petroleum (Exploration and Production) Act dealing with ‘the exploration, exploitation, conservation and management of petroleum existing in its natural condition in land in Guyana, including the territorial sea, continental shelf and exclusive economic zone of Guyana’. After doing so, we will examine both the 1999 Petroleum Prospecting Agreement with Exxon and the 2016 Petroleum Production Agreement with its subsidiaries to assess the extent of compliance with the Act.
General requirements for the grant of licences
The Act makes it illegal for any person to search for petroleum without a licence granted by the responsible Minister. Any person doing so is liable on summary conviction to a fine of G$75,000 and imprisonment for three years.
No licence is to be granted to an individual unless he or she is a citizen of Guyana. However, a company or corporation, or a joint venture comprising citizens of Guyana may be granted such a licence. The process begins with an application to the Minister accompanied by the prescribed fees. The Minister may, by notice served on the applicant, require the applicant to either publish details of his/her application at the time or times, and in the manner, specified in the notice; or give details of his/her application to the persons, and in the manner, specified in the notice.
If the applicant, or any of the applicants, is a body corporate, it must provide such information as may be specified in the notice to enable the Minister to ascertain to what extent the controlling power (whether directly or indirectly) in the direction of the affairs of the body corporate is vested in a corporation, or an individual or individuals, resident outside Guyana. The Minister may cause such investigations, negotiations or consultations to be carried out as he considers necessary.
An applicant for the grant or renewal of a licence is required to execute a bond satisfactory to the Minister for the performance and conditions of the licence; or to make appropriate arrangements, satisfactory to the Minister, for the execution of such a bond. Within 60 days of notification by the Minister of the terms and conditions of the grant or renewal of a licence (or such longer period as the Minister allows), the applicant must inform the Minister of his/her acceptance of the said terms and conditions after which the Minister will issue the licence or the renewal.
As soon as practicable after a licence is granted, the Minister must cause notice of that fact to be published in the Gazette, stating the name of the licensee and the situation of the land in respect of which the licence has been granted. A licensee who fails or neglects, without reasonable cause, to comply with any direction given by the Minister, is liable on summary conviction to a fine of G$30,000 and imprisonment for two years.
Granting of a petroleum prospecting licence
By notice in the Gazette, the Minister may invite applications for the grant of a petroleum prospecting licence in respect of the block or blocks specified in the notice, indicating the period within which an application may be made and the conditions under which the licence is to be issued. The Minister may grant a licence on such conditions as he/she determines, or refuse to grant, a licence in respect of any block or blocks. The licence so granted is valid for four years, excluding a preparatory period not exceeding six months.
A petroleum prospecting licence is to include, among others, the date of the grant of the licence; the identity of the block or blocks to which the licence relates; and the conditions subject to which the licence is granted. The licence may also include a provision for the State, or any agency thereof identified in the licence, to acquire on stipulated terms, or on terms to be agreed, an interest in any venture for the production of petroleum which may be carried on in any block or blocks to which the licence relates.
Not later than one month after the first anniversary of the grant of the licence, the licensee is required to submit to the Minister a detailed programme of work and proposed expenditure for the following year. Where the licensee fails to carry out any part of the requirement with respect to work and expenditure stipulated in the licence, he/she may be liable for the payment of liquidated damages to the State.
Renewal of a petroleum prospecting licence
A person who holds a petroleum prospecting licence may apply for the renewal of the licence, but not more than twice. However, upon first renewal, the licensee must surrender at least one-half the number of blocks (excluding any discovery block) for which the licence was initially granted. Similarly, upon second renewal, the licensee must surrender at least one-half the number of blocks (excluding any discovery block) that were renewed. A licence cannot be renewed for more than three years.
The Minister may refuse to grant a renewal of a prospecting licence. However, he must notify the licensee of his intention to do so and the grounds therefor. The licensee must also be given reasonable time to rectify any deficiency giving rise to the Minister’s refusal to grant the renewal.
Relinquishing of a block or blocks
The holder of a petroleum prospecting licence may at any time relinquish any block or blocks in the prospecting area by giving to the Minister not less than three months’ notice of his intention to do so. However, the remaining prospecting area must constitute a continuous area.
Steps after discovery of petroleum
Upon the discovery of petroleum in a prospecting area, the licensee must: (i) inform the Minister forthwith and furnish him with details in writing within 30 days; (ii) promptly run tests in respect of the discovery and submit the results to the Minister; and (iii) ascertain the quantity of petroleum in the discovery area. The Minister may require the licensee to furnish him with, among others, the chemical composition and physical properties of the petroleum, the stratigraphical position and depth of the discovery. Within 30 days of the submission of the test results, the licensee must notify the Minister whether in his/her opinion the discovery is of potential commercial interest.
Where the discovery is of potential commercial interest, the licensee has two years within which he/she must apply for a production licence. However, upon application, the Minister may allow an extension of this period. The Minister is required to direct the licensee to carry out investigations and studies to assess the feasibility of constructing, establishing and operating an industry for the production of petroleum in the discovery block or blocks concerned; and to submit to him the related reports, analysis and data.
Where in the opinion of the licensee, the discovery is not of commercial interest, the Minister may terminate the prospecting licence within 12 months of being notified.
To be continued –
