OIL AND GAS

[General] [Licence] [Bond] [Petroleum Prospecting Licence] [Term of a Petroleum Prospecting Licence]
[Steps to be taken upon discovery] [Discovery of petroleum in commercial quantities] [Petroleum Production Licence]

General:
The Petroleum (Exploration and Production) Act 1986 establishes the legal framework for the exploration, exploitation, conservation and management of the petroleum existing in its natural condition in land in Guyana, including the territorial sea, continental shelf and exclusive economic zone of Guyana.

The Act is administered by the Guyana Geology and Mines Commission.

No person is permitted to search for in or get from, any land in Guyana, petroleum except under and in accordance with a license granted by the Minister under the act.

Licence:
Licences will only be granted to the following categories

(a) An individual if he is a citizen of Guyana
(b) A company or corporation.

An application for the grant of a petroleum prospecting licence shall be made to the Minister in a specified form.

The application shall state the following

(a) It shall give in respect of the person or, if there is more than one person,the person, making the application-
(i) In the case of an individual, his full name, address and nationality
(ii) In the case of a body corporate, its name, address of its registered or principal office and place of incorporation, the names and addresses and nationality of the directors or equivalent officers and, if the body corporate has a share capital, the name of any person who is the beneficial owner of more that five percent per centum of the issued share capital
(b) It shall identify the block or blocks in respect of which it is made;
(c) It shall, subject to Ministerial approval, be in respect of not more than sixty (60) blocks.
(d) It shall be accompanied by a statement giving particulars of the applicant’s financial status, technical competence and experience including the record of petroleum exploration and production in Guyana and elsewhere
(e) It shall give or be accompanied by a statement containing the geological rationale for the application. [This should be in the form of a geological report outlining regional setting, statigraphy, structure and play concepts based on available data or published information].
(f) It shall give or be accompanied by a statement giving particulars of work and minimum expenditure proposed to be carried out or expenditure proposed to be carried out or expanded in respect of the block or blocks over which the licence is sought, and in particular, details of the programme of work to be performed in the first year of the period being applied for, and a statement of any significant adverse effect which the proposed prospecting operations would be likely to have on the environment and proposals for controlling or eliminating that effect;
(g) It shall give or be accompanied by a statement of particulars of the applicant’s proposal with respect to the employment and training of citizens of Guyana; and
(h) It may set out any other matter which the applicant wishes the Minister to consider.

Bond:
A bond of 10% of the work programme is typically required for the issuance of a prospecting licence.

Petroleum Prospecting Licence.
A petroleum prospecting licence confers on the licensee, subject to the provisions of the Act and to the conditions specified therein, the exclusive right to explore for petroleum, and the right to carry on such operations and to execute such works as are necessary for that purpose, in the prospecting area to which the licence relates.

Term of a Petroleum Prospecting Licence
Subject to the terms of the licence or any conditions imposed by the Minister, a petroleum prospecting licence shall not exceed four years.

In the event that the PPL is renewed the licence shall not exceed three years.

Steps to be taken upon discovery.
Where a discovery of petroleum is made in a prospecting area, the licensee in relation to that area shall.

(i) Forthwith inform the Minister of the discovery.
(iii) Within thirty days from the date of discovery, furnish to the Minister the particulars in writing of the discovery; and
(iv) Promptly runs tests in respect of the discovery and thereafter forthwith submit to the Minister evaluated test results in respect of the discovery; and
(v) Take promptly all steps that are reasonable, in the circumstances relating to the discovery, to ascertain the quantity of the petroleum in the petroleum reservoir to which the discovery relates or, if part only of that reservoir is within the prospecting area, in that part.

Discovery of petroleum in commercial quantities.
Thirty days after the submission to the Minister of evaluated results in respect of a discovery, the Licensee shall within thirty days of the date of submission of the evaluated results, serve on the Minister a notice stating that the discovery is, or, as the case may be, is not in the opinion of the Licensee of potential commercial interest.


Petroleum Production Licence.
A Licensee whose prospective petroleum licence is in force may, within two years of notification to the Minister of discovery of oil in commercial quantities, thereto apply for the grant of a petroleum production licence in respect of any discovery block or blocks of the prospecting area or in respect of any part thereof, which following appraisal, can be shown to contain a petroleum reservoir or part of a petroleum reservoir.