– Natural Resources Ministry says; calls on opposition to take responsibility for its poor performance
–outlines great strides, achievements under current administration

By Feona Morrison

THE APNU+AFC coalition’s record has been described as “despicable and almost criminal” by the PPP/C government, which has condemned the way in which the previous administration handled Guyana’s burgeoning oil sector.

This pronouncement coincides with growing public scrutiny and disclosures about agreements, discussions, and general handling of the oil riches that have the potential to revolutionise the economy of the South American country.

The government, led by President Dr Irfaan Ali, minced no words in its assessment of the APNU+AFC’s stewardship of Guyana’s oil industry. Through a statement issued by the Ministry of Natural Resources on Saturday, the government responded to the Opposition’s recent falsehoods about its stellar track record in managing the petroleum sector.
The government reminded that when it assumed office in 2020, it audited the management infrastructure for the country’s multi-billion-dollar petroleum sector, only to discover a deplorable state of affairs, given the abysmal five-year leadership of the APNU+AFC coalition.

According to the ministry, because basic legislative and regulatory duties were neglected for years, the nation was not ready to handle the industry.
The government also emphasised how its predecessor prioritised questionable transactions, disregarded transparency norms, and failed to put the interests of the Guyanese people first.

Lopsided contract
Key among the criticisms levelled by the current administration is the lack of transparency in the negotiation of the country’s oil contract. The government repeated that the contract was signed and negotiated in secret and is armed with a stabilisation clause that prevents Guyana from making any changes to the Guyanese people’s share. It said APNU+AFC also hid this contract from the public for one year before caving to protests from local stakeholders and unrelenting pressure from the media to release the document that remains the greatest giveaway of Guyana’s history.

While the PPP/C administration acknowledged that it is on record stating that the contract would not be renegotiated, due to respect for the sanctity of contracts and the devastating impacts such a course of action would have on the investment climate, to ensure maximisation of value, it has proposed strengthening the legislative and regulatory framework for the sector, which it said it continues to do.

According to the government, it has embarked on prudent contract administration to ensure the most efficient development and beneficial use of the resources while also securing benefits for locals beyond direct revenues.

Prioritisation of Guyanese
The government called out the APNU+AFC for failing to pass a Local Content Act, leaving billions in oil sector expenditure to be awarded to foreign companies while locals made relentless calls for government intervention. It stated that the Local Content Act was passed in December 2021 and since this law’s enactment to date, over US$1 billion has been invested in the use and expansion of Guyanese goods, services, and skills in support of the petroleum sector.

Furthermore, it said the coalition failed to overhaul the Petroleum Act, which was 34 years old by the time the PPP/C reassumed office in 2020, as well as, failed to get the Gas-to-Energy project off the ground, despite continuous increases in national power demand.

The Petroleum Activities Act was passed in August 2023, positioning Guyana on the path of responsible, transparent and modern petroleum management, the statement noted.
Importantly, the government noted that contracts have been awarded for the Gas-to-Energy project with significant works already underway. The project, it said, will slash energy costs by 50 per cent while delivering clean and reliable energy by 2025.

While the APNU-AFC “dilly-dallied on the Stabroek Block oil audits”, under the tenure of the PPP/C government, two audits were completed for the period 1999 to 2017 and 2018 to 2020.
“As a manifestation of the government’s objective of upskilling Guyanese for the petroleum sector, a local firm was hired for the 2018-2020 audit. The procurement process for an audit of more costs has started and the award of a contract is imminent,” the statement added.

Strengthened NRF
The government pointed out that it came to light that the previous administration had unjustly instituted a Natural Resource Fund (NRF) that would have produced a power-drunk minister, and which had such a complex withdrawal rule that it was criticised by the Inter-American Development Bank (IDB) for conspiring against transparency and public understanding.

These developments, the statement noted, unfolded in the aftermath of the coalition’s ousting via a No-Confidence Motion, during which they clung to power, attempting to subvert democracy and execute a thwarted plot to manipulate the will of the people.

The government said that a strengthened NRF Act was passed in 2021, with robust provisions to improve transparency and accountability such as forming a Board of Directors, a nine-member committee for effective oversight, and mandatory publication of petroleum revenue reports in the Official Gazette, with 10 years’ imprisonment for non-compliance.

Hidden signing bonus
The coalition is under fire by the government again, for its lack of transparency regarding a signing bonus related to Guyana’s oil sector.

According to the government, the coalition not only hid the US$18 million signing bonus paid by ExxonMobil but lied about its existence, and said it was a gift when caught.

The government said the Petroleum Activities Act clearly stipulates the instances where signature bonuses may be applied and the process for doing so.

“This was enforced for the 2022 Licensing Round where the minimum signing bonuses of US$10 million for shallow water blocks and US$20 million for deepwater blocks were defined in the requisite Gazette Notice and the published Terms of Reference. These efforts further underscore this Government’s commitment to transparency and accountability.”

No review of EIA
Moreover, the coalition has been flayed for granting the Liza Phase One Environmental Permit on the same day they received the 1500-page Environmental Impact Assessment (EIA) for the project. “Not only does this prove they performed no review, but the permit also violated the law, as it was given a 20-year term despite the law allowing a maximum five-year term.”

The government has ensured that the permits were brought into compliance with the law. All permits are now subjected to a rigorous review process.

APNU+AFC must answer for its record
Before the APNU+AFC ventures to heap coals on the continuous improvements in the sector, the government said the Opposition must first answer for its record.
According to the PPP/C administration, it is tone-deaf for the Opposition to say that the government is not administering the Stabroek Block contract as it should.

It noted that this demonstrates a fundamental misunderstanding of the issue, while highlighting that the APNU+AFC faced years of public outcry to institute a Local Content Act and audit ExxonMobil’s costs.

The ministry explained: “Effective contract administration involves rigorous monitoring and oversight of offshore operations to ensure compliance with the agreement’s terms, and utilization of the terms to secure benefits for the people of Guyana.”

“These are arguably two of the most critical contract administration needs, but they were ignored. Today, Guyana’s petroleum sector is governed by a modern legal framework, improved contracts, and environmental stringency. The PPP/C administration has made substantial progress in rectifying the governance deficiencies inherited from the APNU+AFC era.”

These efforts have not only stabilized the sector but also positioned it for more sustainable and inclusive growth, the statement added. The PPP/C government has continued to provide ongoing vigilance, adaptation, and community engagement which are crucial to ensure that the petroleum sector serves as a catalyst for broad-based economic development in Guyana.

Additional achievements
In an effort to encourage ethical methods of oil and gas extraction, the government has completely redesigned its system of environmental licenses.
These include establishing cradle-to-grave waste management, charging a US$50 flaring fee, requiring the presence of an in-country capping stack, requiring the subscription to another contingency plan, and requiring the treatment of produced water to international standards.

The historic first licensing round in Guyana has begun, and this year’s announcement of awards is anticipated. Based on industry-wide standards, the government has unveiled two updated model Production Sharing Agreements (PSAs).

These include better financial terms, like a new royalty rate of 10%, a lowered cost recovery ceiling of 65%, and a 10% tax on petroleum profits for concessions in both deep and shallow water.
The government has strengthened the Field Development Plan (FDP) review process which takes a minimum of seven months. This now entails a more detailed review which has led to more fulsome submissions in line with international standards and stringent Petroleum Production Licences.

A US$2 billion parent company guarantee for oil spills and a US$600M per occurrence insurance package have been secured, enhancing spill response and inspection capabilities.
To bolster auditing capacity, the Guyana Revenue Authority is ramping up efforts, while the Environmental Protection Agency (EPA) has implemented Information and Communications Technology (ICT) infrastructure for real-time monitoring of offshore oil and gas activities.

Landmark legislation addressing oil spills is in progress, complemented by the establishment of an Oil and Gas Department at the Guyana National Bureau of Standards (GNBS) and the launch of a petroleum website for public updates.

The government is investing in institutional strengthening, including the development of technical capacity within entities like the Guyana Geology and Mines Commission, the Local Content Secretariat and the Ministry of Natural Resources.

Additionally, the Gas Monetization Strategy is nearing finalization, while over 1,200 Guyanese are undergoing training for oil and gas sector opportunities, with a focus on nearshoring.

A significant allocation of $420.5 million has been earmarked for training programmes, aiming to prepare up to 4,500 individuals for jobs in the sector by 2026. The Guyana Technical Training College in Port Mourant, Berbice, inaugurated in early 2024, will equip participants with hands-on experience in practical operations, troubleshooting, and maintenance tasks.

Through partnerships with oil-producing nations, such as Brazil, India, Ghana, Suriname, the Dominican Republic, the United Arab Emirates (UAE) and Trinidad and Tobago, among others, Guyana aims to strengthen economic diplomacy in the oil sector.