PNCR/APNU wants to change 2016 PSA, promises oil and gas anti-corruption office to prosecute offenders

Last Updated on Wednesday, 25 September 2024, 22:48 by Writer

The opposition People’s National Congress Reform/A Partnership for National Unity (PNCR/APNU) on Wednesday unveiled plans to ask ExxonMobil to agree to change the 2016 Production Sharing Agreement (PSA) as well as set up an inspector general’s office (IGO) to go after corruption in the oil and gas sector.

“Considering the vastly changed conditions since the signing of the 2016 Stabroek Block 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 (ExxonMobil, Hess, and CNOOC) to maximize the benefits of the oil resources to the people of Guyana while ensuring a fair share of profit for Stabroek Block Partners,” that opposition grouping said in its statement. The opposition coalition envisages that the 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, shared management and decision-making in operations in the oil and gas sector.

Article 32.1 of the PSA prohibits the government from doing several things before getting agreement from the “contractor”, Esso Exploration and Production Guyana Limited, now ExxonMobil Guyana. “Except as may be expressly provided herein, the Government shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement without the prior written consent of Contractor,” states that section.

The PNCR/APNU said the proposed IGO would be adequately resourced and vested with the authority to conduct independent investigations and, where necessary, recommend prosecutions. “To eradicate corruption and unethical conduct by Government and contractor officials, we will institute an independent Inspector General’s (IG) Office with a 24/7 anonymous hotline to involve the public in reporting any knowledge or appearance of corruption,” the opposition said.

In terms of oversight, the PNCR/APNU promised in what it termed its “comprehensive set of policies, strategies and principles that will guide our management of the oil and gas sector” to review and amend the Petroleum Commission legislation and establish an independent/autonomous commission to manage the oil and gas sector from application for licenses through auction, exploration, production, sales, refining, and gas utilisation for energy conversion. The PNCR/APNU-led government said it would conduct a feasibility study 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.

PNCR Leader Aubrey Norton said the commission would be staffed with the “highest calibre fit-for-purpose professionals”. Additionally, he said his political organisation would go ahead with the World Bank’s plan for an oil and gas unit at the Environmental Protection Agency (EPA) comprising skilled and experienced O&G professionals to provide adequate oversight.

If it wins Guyana’s next general and regional elections expected to be held in late 2025, the PNCR/APNU said the 1996 EPA Act would be reviewed to ensure safe and environmentally sound oversight to comport with Guyana’s new and foreseeable development. The opposition noted that the Act was passed 19 years before oil and gas were discovered and so did not consider specific O&G regulations and other unforeseen industrial activities.

The PNCR/APNU also wants to complete the cradle-to-grave management plan commenced by the coalition, for the management of the millions of tonnes of hazardous & non-hazardous wastes generated by the oil and gas industry and the rest of the country, to ensure that treatment, storage, and disposal (TSD) of these wastes are done in accordance with safe and environmentally sound international standards and practices. “This will include completion of site evaluations and selections, and designs of state-of-the-art landfills to guarantee adequate treatment, storage and disposal (TSD) currently unavailable in Guyana,” PNCR/APNU added.

Still in the area of the environment, that opposition wing said it would immediately reinstate the coalition government’s requirements for full liability coverage including the appropriate insurance, as well as, a parent company guarantee to cover the full cost of an oil spill; prohibition of gas flaring except in special cases of start-up, emergency and maintenance in compliance with the environmental impact assessment (EIA) and the re-injection of the very hot, toxic and oil-laced water, in accordance with international standards and the World Bank.

Also on the PNCR/APNU’s radar are feasibility studies to decide whether to create a national oil company (NOC) and/or a local refinery. Both APNU+Alliance For Change and the incumbent People’s Progressive Party Civic administrations have determined that an oil refinery is not feasible.

Mr Norton said a PNCR/APNU-led administration would also restructure the Natural Resource Fund and revise the Local Content policy to make jobs and business opportunities available to a broad cross section of Guyanese. “In order to stimulate the local economy and gain skills and international competitiveness in the supply of goods and services, we 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,” he said.

For full transparency, APNU+AFC says it 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 conveniently and timely. Further, the coalition plans to complete an in-depth analysis of projected estimates of annual oil and gas production through the life of the fields, and estimate projected government revenues that will inform the government’s annual budgetary allocations and outyear strategic planning. Also, PNCR/APNU said there would be a regular review of the movement of oil prices in the short, medium, and long term.

In the area of human resource development, the PNCR/APNU says in order to ensure economic sustainability during and after the oil and gas era, it will invest a lot of the oil and gas revenues in education as well in local areas of the regions in the form of capacity building, projects, and job creation to avoid the oil curse syndrome.

An APNU+AFC administration, Mr Norton says, will conduct a national skills audit for all sectors of the economy, including oil and gas to 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 that will be provided by the international contractors. That party says it will also establish a consortium comprising the University of Guyana , the Government Technical Institute, and other training institutions to facilitate the training needs identified in the skills gap analysis.

On procurement, the PNCR/APNU says it will develop a directory of registered diaspora oil and gas professionals and businesses. “The aim is to ensure an active and organized utilisation of their skills through partnering, and advising, with provision “for preferential consideration in the procurement process.”

The PNCR/APNU says that within 90 days of taking power its administration will establish an advisory team of professionals in business, contracts, law, economics, auditing, engineering, geology, and renewable energy to advise the government on the upstream, midstream, and downstream planning, development and administration of Guyana’s oil and gas sector.