Even as Guyana has begun producing oil, there is an absence of modern legislation to govern the oil and gas sector.
This is an area of concern for the Guyana Chapter of the Extractive Industries Transparency Initiative (EITI), an international body that ensures extractive sectors worldwide are managed in an open manner.
EITI Guyana National Coordinator, Dr Rudy Jadoopat, during an exclusive interview with Inews underscored the urgent need for oil and gas legislation, especially when it comes to ensuring transparency and accountability in the sector.
“Legislation reform which is an important one. As you know, Guyana is now an oil-producing country; however, the legislations in Guyana, the laws of Guyana need to be reformed, need to be amended, in order to allow for better governance of the oil and gas sector. There is a lot of work to be done and I understand that some things are in place while some are not and some are in drafting stage. But we need these legislations to be fine-tuned and be enacted as soon as possible,” Dr Jadoopat emphasised.
For his part, Dr Jadoopat says he will be meeting with the Department of Energy soon to discuss ways in which the country can accelerate efforts to develop the requisite legislation.
“EITI requirement is for us to publish the data on oil sells and the Department of Energy reached out to us and we are interacting with them to establish a mechanism whereby information that is required by the EITI reporting process on the first trails of oil will be showing back and forth and we have to establish that communications line with them, so, hopefully, next week we look forward to meeting the Department of Energy,” he explained.
Meanwhile, Department of Energy Head, Dr Mark Bynoe had revealed, at a press conference in May last year, that they have completed a gap analysis of existing laws – an exercise that highlighted shortcomings in Guyana’s oil and gas-related laws, compared to industry standards.
“One of the things we have in our possession at this point in time is that draft gap analysis and diagnostic review,” Dr Bynoe said. “That has to go through us speaking to other partners as well, because it doesn’t only impact the Department, it impacts a number of other departments and stakeholders.
“It is because of that review you would now see us advertising for legal advisory services, because that review will point the way in terms of what needs to be repealed, what needs to be replaced and what needs to be amended and made more contextually relevant to the realities we face today.”
He gave an example of primary legislation like the 1986 Exploration and Production Act. According to Dr Bynoe, the Act is silent on issues like downstream activities in the oil and gas sector.
“It also requires enhancement in decommissioning and local content. So, these are all areas we’ll be looking at. Once these things are put in place, we then move towards issues of [the] Petroleum Commission Bill, that we have put in abeyance until the primary legislation is put in place,” Dr Bynoe explained.
Recently, People’s Progressive Party/Civic (PPP/C) Executive Member Gail Teixeira has labelled the recent first oil reception as offensive, saying that the event demonstrated clearly how revenues generated from the sector would be wantonly spent by the incumbent A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition.
Teixeira lamented the fact that despite promises by the Government and Energy Director, Dr Bynoe that the Local Content Policy would be in place before first oil, up to now, it has not been finalised.
The EITI is an international body that requires implementing countries to publish comprehensive reports which include the full disclosure of Government revenues from the extractive sector, as well as the disclosure of all material payments made to the Government by companies operating in the oil, gas, and mining sectors.
Guyana’s first report was submitted to the International Secretariat on April 25, 2019. Membership in the EITI means that Guyana will have to adhere to the 12 principles of the EITI standards voluntarily.