MORE than eight years after Guyana’s first significant oil discovery and almost 40 years after the passage of the Petroleum (Exploration and Production) Act of 1986, the government is now advancing the most significant changes to the petroleum governance framework in years.
The Ministry of Natural Resources announced last week the release of a draft Petroleum Activities Bill which is available for public feedback between June 20 and July 3. The draft bill is a comprehensive attempt to modernise Guyana’s petroleum governance structure to reflect years of successful discoveries and rising production.

In a press release, the Department of Public Information (DPI) stated that the proposed petroleum bill will “introduce improvements and safeguards related to safety, emergency response, cross-border unitisation, supervision and monitoring requirements, and authorises the minister to prescribe regulations about key administrative and operational aspects of exploration and production activities.”

This is a natural step for Guyana, as its regulatory capacity at agencies like the Environmental Protection Agency (EPA) grows stronger and the Government learns from its experience with oil development.
Guyana has steadily progressed in both discovery and production of oil since 2015 and the now prolific Stabroek Block is home to two projects in production and proven reserves of approximately 11 billion barrels of oil equivalent. Outside Stabroek, Guyana’s waters still remain largely unproven, but the government is eager to incentivise broader exploration—another reason to ensure regulations are modern.

Passage of the bill could usher in positive changes in how Guyana manages its oil and gas resources in the decades to come and will be closely watched by the international investment community to see how it balances the need for strong environmental protection with attractive fiscal terms like those that have attracted more than US $30 billion in committed investments so far. That’s especially key as Guyana embarks on its first major public oil block auction.

The draft bill also follows significant investments in the areas of offshore safety and monitoring. Earlier this year, the government signed a landmark three-year agreement with Maxar Technologies, a Colorado-based space technology provider of satellite monitoring services. This agreement will provide Guyana with cutting-edge, satellite-based environmental monitoring services both offshore and onshore to identify coastal pollution, prevent deforestation and catch illegal logging and mining activities.

Of note in the forthcoming bill is a provision mandating oil and gas companies to make tangible contributions to the local economy on both a social level and capacity-building level. This requirement, paired with the requirements under the Local Content Act 2021 will create tremendous opportunities for Guyanese businesses, especially those that have taken the opportunity of training and certification.

This law should help codify many activities that are already taking place. The landmark Greater Guyana Initiative (GGI) created by the Stabroek Block co-venturers in 2021 to support capacity development across the country for the next decade has already made several investments in critical areas, including partnerships with the Council for Technical and Vocational Education and Training (TVETS) and the industry funded Center for Local Business Development.

The companies pledged GY$20 billion (US$100 million) to support the initiative, which includes programmes focused on building human capacity, advancing education, improving healthcare and promoting sustainable economic development in Guyana.
The bill also includes a framework for the permitting of pipelines and plants to transport and treat petroleum products. With the ongoing development of the Gas-To-Energy (GTE) project, this framework has major implications for the investment decisions by ExxonMobil Guyana and its partners.

The final investment decision on the GTE project likely won’t be official until the third quarter this year after the passage of the new law. The bill also lays the regulatory groundwork for cutting edge emissions-reduction technology like carbon capture and storage.
According to the DPI, supplemental regulations are expected to follow the bill in the coming months and changes to the draft language are likely in response to public comment.

The introduction of this bill is clear indication of the government moving in the right direction by strengthening existing frameworks to meet the moment. This is a natural evolution for a country that’s maturing quickly as an oil producer and a clear response to the progress being made.