-lays out 20-point plan for sector
The PNCR/APNU yesterday released a list of policies, strategies and principles for the petroleum sector and said it would review the controversial 2016 PSA to maximise benefits to the country but it did not explicitly say it would move for renegotiation of the pact or increased royalties.
Both groups were part of the 2016 APNU+AFC government that signed the much reviled Production Sharing Agreement (PSA) which fixed oil royalties at two percent and spared ExxonMobil and partners from paying taxes to the state.
The People’s National Congress Reform (PNCR)/ A Partnership for National Unity (APNU) plan was presented yesterday by Opposition and PNCR Leader, Aubrey Norton.
According to a release yesterday, these policies et al, are geared to help govern and manage the oil and gas sector in the best interest of the people of Guyana and in accordance with the rule of law. And in addition to its domestic applications, it aims to help utilise the resources of the oil and gas sector to craft a foreign policy which will facilitate the integration of the sector into a strong national economy to help protect the territorial integrity and sovereignty of the nation.
The list began by stating that within 90 days of taking office, the PNCR/ APNU administration will constitute an advisory team of pertinent professionals to advise the government on the upstream, midstream, and downstream planning, development and administration of Guyana’s oil & gas (O&G) sector.
The second item on its to-do list concerns the reviewing of the existing drafts of the Petroleum Commission Legislation equipped with professionals to manage the O&G sector from application for licences through auction, exploration, production, sales, refining, and gas utilisation for energy conversion.
Thirdly, the release stated the intention to eradicate corruption and unethical conduct by government and contractor officials. One of its strategies, it explained, will be to institute an independent Inspector General’s Office with a 24/7 anonymous hotline to involve the public in reporting any knowledge or appearance of corruption. It assured that this office will be adequately resourced and vested with the authority to conduct independent investigations and, where necessary, recommend prosecutions.
Fourthly, the Coalition Government intends to immediately reinstate requirements for full liability coverage, which includes the appropriate insurance, as well as a parent company guarantee to cover the full cost of an oil spill. It will also prohibit gas flaring except in special cases and call for the re-injection of the very hot, toxic, and oil laced water, in accordance with international standards and the World Bank. It also plans to implement the World Bank’s plan for an O&G Unit at the EPA.
Item number five speaks to the inculcation of a safety and environmental protection culture which asserts that the safety and stewardship of the environment take priority over production and profits. “There must be accountability for any violation of this rule.”
The coalition expressed its intention to complete an in-depth analysis of projected estimates of the annual O&G production profile through the life of the fields; and the corresponding estimates of
projected government revenues. This it posited, will inform the government’s annual budgetary allocations and out-years strategic planning.
Building capacity
Moving on to the issue of economic sustainability during and after the O&G era, the release highlighted that building capacity in the education sector was its highest priority in the investment of O&G revenues, coupled with the equitable distribution of wealth to local areas of the regions in the form of capacity building, projects, and job creation to avoid the oil-curse syndrome.
And as part of its job creation strategy, the coalition will conduct a national skills audit for all sectors of the economy, including O&G. This it posited, will identify the needed categories, competencies, and skills along with the strategies for the training and development that will include on-the-job, off-the-job, and classroom training, provided by the international contractors. Local tertiary education institutions will facilitate the training needs identified in the skills gap analysis.
In tandem with the aforementioned approach, the diaspora will be tapped for its collective expertise. As part of this effort, a directory of registered diaspora O&G professionals and businesses will be compiled to ensure an active and organised utilisation of their skills through partnering, and advising, with provision for preferential consideration in the procurement process.
The tenth item on the list concerns the existing PSA. It states, “Considering the vastly changed conditions since the signing of the 2016 Stabroek Block Production Sharing Agreement (PSA) and consistent with Article 32.1 of the PSA, we will complete a top-to-bottom review of the PSA and then engage the Stabroek Block Partners, to maximise the benefits of the oil resources to the people of Guyana while ensuring a fair share of profit for Stabroek Block Partners.” According to the release, such a review will include, but not be limited to, ring-fencing of projects, oil-tax regime, environmental responsibilities, decommissioning, transparency, the timely reporting of information, regulatory oversight and real-time monitoring, auditing, local content, and shared management and decision-making in operations in the O&G sector.
And added to this list is the intention to conduct feasibility studies to determine the viability of creating a National Oil Company (NOC) and/or a local refinery.
Moving on, the coalition revisited its Cradle to Grave Management Plan in its efforts to manage the millions of tons of hazardous & non-hazardous wastes generated by the O&G industry, and the rest of the country, to ensure that treatment, storage, and disposal of these wastes are done in accordance with safe and environmentally sound international standards and practices.
The release then turned its attention to another thorny issue, the Environmental Protection Agency (EPA), stating, “Taking into account that the existing 1996 Environmental Protection Agency (EPA) Act was legislated 19 years before O&G discovery and hence, did not consider specific O&G regulations and other unforeseen industrial activities, we will complete a holistic review of the EPA Act with recommended amendments for legislative approval to ensure safe and environmentally sound oversight to comport with Guyana’s new and foreseeable development.”
In a nod to transparency and openness, the coalition will institute a publication of information protocol, ensuring that all information including, but not limited to, contracts, agreements, contractor quarterly reports, new discoveries, updated reserves, and production data, be made accessible to the public in a convenient and timely manner.
And concerning the use of natural gas as part of Guyana’s development strategy, the release stated that a complete feasibility study will be undertaken to evaluate the most economical and environmentally viable options for utilising the produced gas as an energy resource for Guyana, including the use of ISO containers for the transportation of natural gas to shore.
Also falling under the review hammer would be the oft-discussed Natural Resource Fund (NRF) with the aim to “restructure it as necessary to ensure its independence, prudent management, and the fulfillment of its mandate.”
And in an effort to stimulate the local economy and gain skills and international competitiveness in the supply of goods and services, the coalition will institute a local content policy that ensures equitable participation of local businesses by requiring the contractor to maximise expenditures on local goods and services.
