Oil and gas regulation being streamlined to keep pace with industry – Dr. Jagdeo

The Government has put two critical pieces of legislation in place – Local Content Act 2021 and Natural Resource Fund Act 2021, and it does not plan to stop there. It intends to put structures in place to protect its peoples’ interests, while providing efficient regulatory services of international standard.

Delivering the government’s policy for the sustainable management of the industry during the international energy conference opening day on Tuesday, Vice President Dr. Bharrat Jagdeo said the government supports aggressive pacing for the development of the industry, and that it will work to prevent government from being a hindrance.

“We support accelerated exploration, and our incentive regimes will reflect that support for accelerated exploration.”

“Now, we have been trying to evolve the regime because the pace of development has been a rapid one and at the level of the government, we have to try to keep the regimes evolving and our regulatory approvals at the pace so that we don’t become a humbug on the development of the industry and slow down the pace. It has been a challenge.”

Dr. Jagdeo said, while all policies and institutional structures have not evolved to where the government wishes them to be ultimately for a mature environment, there are key principles which will guide the government in its relations with the industry.

Government does not intend to have investors waiting an entire year for Yellowtail’s approval, as had occurred with Payara. Approval is expected in March.

“You will see measures taken in Guyana not just to encourage the existing holders of concessions to move swiftly to exploration and to increase the pace of that. But at some point, in time, the remaining blocks, which we have been, many people are asking ‘when can we access a block or some concession offshore?’… In the past, it was on the ‘first come, first served’ basis. But since we found oil, we have changed the policy.”

This policy, he explained, includes getting better terms for the people of Guyana in the new contracts. In this regard, he cautioned prospective investors not to be unduly alarmed by the thought that all of their incentives will be taken away, but to note that the prosperity has to be shared between them and Guyana’s people.

One newer consideration by the government to secure a bigger stake for Guyana is the formation of a national oil company. This has been employed by some of Guyana’s bilateral partners, including Suriname and Ghana.

Dr. Jagdeo said some of the larger operators have made proposals to work with government through a national oil company and utilise the remaining blocks. This would give Guyana a direct – and involved stake in the development of the resources.

The Vice President stopped short of saying that, when the government is ready to issue more oil blocks in the third quarter of 2021, applicants would receive preferential consideration if they make attractive proposals to work with the government through a national oil company.

Still, whether the government decides to form such a company or solely auction to private operators is a decision the government has not yet made, but Dr. Jagdeo committed to working that out by the third quarter of 2021.