Guyana is divided into two petroleum basins, Guyana and Takutu.¹ The Guyana Basin is further divided into two basins, onshore and offshore.² Three (3) wells have been built in the Takutu basin, but the commercial viability of the same has not yet materialised.³ Likewise, the commercial viability of the onshore Guyana Basin, where 13 wells were drilled from 1916 to the present, has yet not materialised despite the discovery of crude oil in 2 of the 13 wells.⁴  The upstream industry is focused offshore due to the vast amount of commercially viable oil and gas in the Guyana Offshore Basin.

Guyana has an established upstream oil industry structured around the Stabroek Block offshore in which ExxonMobil Guyana Limited (“Exxon”) (formerly Esso Exploration and Production Guyana Limited) holds a 45 % operating stake and its co-ventures, Hess Guyana Petroleum Corporation Limited (“Hess”) and China’s CNOOC Nexen Petroleum Guyana Limited (“CNOOC”) hold 30% and 25% respectively.  They have made over 30 discoveries in the Stabroek Block, with more anticipated.  The discovered resources are expected to produce more than 11 billion barrels of oil equivalent.⁵

Within the Stabroek Block oil production comes from three floating production, storage, and offloading (FPSO) vessels, namely Liza Destiny (known as the Liza Phase 1 Petroleum Development Project (PDP)), Liza Unity (known as the Liza Phase 2 PDP) and Prospect (known as the Payara PDP):⁶

1. The Liza Phase 1 PDP is a resource of about 450 million barrels of oil, 17 development wells, and an oil production capacity of 160,000 barrels per day (bpd). The first oil production from the project began in December 2019.
2. Liza Phase 2 PDP is a resource of about 600 million barrels of oil, 33 development wells, and an oil production capacity of 500,000 bpd. The first oil production from the project began in February 2022.
3. Payara PDP is a resource of about 600 million barrels of oil, 33-45 development wells, and an oil production capacity of 250,000 barrels per day (bpd). The first oil production from the project began in November 2023.

As of February 2024, Guyana’s oil production is around 645,000 bpd and is expected to increase in the coming years, most immediately to more than 1.3 million  bpd by the end of 2027.

There are other PDPs in the “pipeline” within the Stabroek Block, namely:

1. Yellowtail: resource of about 925 million barrels of oil, 45-55 development wells, oil production capacity of 250,000 bpd, permit and licence issued and approved, and first oil expected in 2025.
2. Uaru: resource of about 800 million barrels of oil, 40-76 development wells, oil production capacity of 250,000 bpd, permit and licence issued and approved, and first oil expected in 2026.
3. Whiptail: resource of about 850 million barrels of oil, 33-72 development wells, oil production capacity of 250,000 bpd, permit and licence issued and approved, and first oil expected in late 2028.
4. Hammerhead: 14 -30 development wells, oil production capacity of 150,000 bpd, permit and/or licence not yet issued and approved, and first oil expected in 2029.
5. Longtail: announced, no permit and/or licence issued or approved, first oil expected in 2030.

An established framework for the upstream gas industry exists under the Stabroek Block Petroleum Sharing Agreement. The focus, however, has been the oil industry, but offshore fields also contain a lot of gas, for which there are development plans.

Guyana’s definite natural gas reserves offshore are estimated to be 16 trillion cubic feet (tcf) as of January 2024 (more discoveries have not been proved, but it is estimated that there is at least 30 million tcf of gas offshore). Guyana has no natural gas pipelines; the gas is being reinjected into the ground.

However, there is a proposed project called Gas-to-Shore (also sometimes called Gas-to-Energy) that has been seeking investment since about 2021.⁷ This project, to be undertaken by Exxon, has been delayed due to legal battles and risk cost overruns. The project aims to transport the associated natural gas production from Liza Destiny and Liza Unity FPSOs to the coast through a 140-mile-long natural gas offshore pipeline being built by Exxon to feed a 300-megawatts (MW) combined-cycle power plant and a natural gas liquids (NGLs) facility.⁸ As of April 2024, the first phase of the 300 MW power plant was running 6 months behind schedule, and it was reported that full operation is not expected until the last quarter of 2025.⁹

Early in 2024, the government of Guyana launched a tender for companies interested in developing its gas reserves. The goal is to send the associated gas from the Liza 1 and 2 fields to shore for processing and use for power generation and exports.¹⁰

Notably, the Orinduik Block, offshore,  located near the Stabroek Block (about 6.8 miles from the Liza discovery) is another commercially viable block. Tullow Oil in 2019 discovered two new oil fields in the Orinduik Block (Jethro-1 and Joe-1), which contain 180 feet of heavy crude oil with a high sulfur content. Eco Atlantic Oil & Gas Ltd. acquired a 60% operating interest in the block from Tullow Oil, increasing its total interest to 75%. Eco Atlantic Oil & Gas ltd is, therefore, now playing a leading role in developing the Orinduik Block’s potential.¹¹ The upstream oil and gas industry is, therefore, expected to develop in Guyana in relation to other Blocks.

Footnote(s):

¹ Guyana Geology and Mines Commission, “Petroleum GGMC, 29 January 2019) <https://www.ggmc.gov.gy/services/all/petroleum > accessed 2 January 2025)

² ibid

³ ibid

⁴ ibid

⁵ Jeff Mower, Jim Levesque and Starr Spencer, ‘Infographic: Guyana’s oil boom leads to producer scramble for space (S&P Global,  4 December 2023) <https://www.spglobal.com/commodity-insights/en/news-research/latest-news/crude-oil/120123-infographic-guyana-oil-output-drilling-fangtooth-production#:~:text=Not%20registered?,subscriber%20notes%20&%20personalize%20your%20experience.&text=Production%20is%20expected%20to%20reach,specifically%20Norway’s%20Johan%20Sverdrup%20crude.&text=Listen:> accessed 30 December 2024

⁶ OilNOW, ‘ExxonMobil’s Guyana oil venturers: A roadmap to 1.7 million b/d’ (OilNOW, 30 December 2024) <https://oilnow.gy/news/a-timeline-of-exxonmobils-guyana-oil-development-projects/> accessed 30 December 2024

⁷ EIA, “Guyana”, (EIA, 29 May 2024) <https://www.eia.gov/international/analysis/country/GUY> accessed 3 January 2024

⁸ ibid

⁹ Sabrina Valle, “Guyana gas-to-power project to shave weeks off oil output, hit revenue” ( Reuters, 8 April 2024) <https://www.reuters.com/business/energy/guyana-gas-to-power-project-shave-weeks-off-oil-output-hit-revenue-2024-04-08/ > accessed 3 January 2024

¹⁰ Irina Slave, “Guyana Eyes Gas Boom, But Can It Deliver?”(Oil Price, 25 November 2024) <https://oilprice.com/Energy/Natural-Gas/Guyana-Eyes-Gas-Boom-But-Can-It-Deliver.html#:~:text=Guyana%20has%20become%20notorious%20for,in%20a%20somewhat%20odd%20way. >  accessed 1 January 2025

¹¹ EIA, “Guyana”, (EIA, 29 May 2024) <https://www.eia.gov/international/analysis/country/GUY> accessed 3 January 2024

The right to explore and exploit oil and gas resources is governed by the Petroleum Activities Act (“PAA”)(which repealed and replaced the Petroleum (Exploration and Production) Act and the Petroleum (Production) Act. The licensing regime in Guyana is the same for onshore and offshore.

1. Applications for the right to explore and exploit oil and gas resources must be made by a company. Foreign companies must register in Guyana; however, they are not required to incorporate locally to be eligible for the grant of a licence under the Petroleum Activities Act, namely the petroleum exploration licence, petroleum production licence, pipeline operations licence, and geographic storage licence for carbon dioxide.
2. Those seeking any of the said licences must apply to the Minister Responsible for Petroleum Activities (currently the Minister of Natural Resources) in the prescribed form and pay the prescribed fee, which is dependent on the terms of the licence and the characteristics of the block in which exploration and production is being undertaken.
3. The licence is granted subject to conditions which the Minister deems fit, as well as outlined in the licence.
4. Licences are granted through the Minister by the process of competitive tender or direct negotiation, where the Minister, acting on the direction of Cabinet, determines that special circumstances exist which justify the use of the direct negotiation to grant a licence in the national interest or national security (section 7).
5. Under the competitive tender process, the Minister, by notice in the Gazette (government notices published online and accessible as follows: https://officialgazette.gov.gy/) (a) invites application in respect of the areas specified in the notice; and (b) specifies the period within which the application may be made, and the conditions subject to which any application may be made. After receiving the applications, the Minister may select the most substantially responsive bidder for further negotiation (section 7).
6. The Minister will prescribe the qualification criteria, which may include: (a) technical qualification criteria, which may vary by geography or water depth; (b) financial qualification criteria commensurate with the financial resources needed to carry out petroleum operations in relation to specified blocks; (c) requirements related to the applicant’s safety and environmental policies; (d) requirements related to previous performance by the applicant in petroleum operations in or out of the jurisdiction of Guyana; (e) the requirement for an applicant to provide a financial undertaking for the payment of a bonus bid; (f)  any of the following criteria such as a signature bonus, exploration criteria and other commercial, climate or social investment considerations the Minister may deem fit (section 8).
7. The Minister may enter an agreement in accordance with the PAA for the grant of a licence under the Act, the conditions to be included in the license or permit granted or renewed under Act and any other incidental or connected matters.
8. Notably, a petroleum production licence (PPL) must be accompanied by a field development plan for the construction, establishment and operation of all facilities and services for, and incidental to the development, production, processing, storage and transportation of petroleum from the proposed production area (section 32).
9. Also, the PPL will not be granted unless: (a) the field development plan proposed by the applicant would ensure the most efficient development, production and beneficial use of the commercial discovery; (b) the applicant has adequate financial resources and technical and industrial competence and experience to carry on effective production operations; (c) the applicant is able and willing 10 comply with the conditions on which the licence is proposed to be granted; (d) the plans of the applicant for local content are in compliance with the Local Content Act; (e) the exercise of any option given to the State under section 19(4) to acquire an interest in the PPL are complied with to the satisfaction of the Minister; (f) the plan takes in account the best international industry standards and practices; and (g) where the applicant is in default, the Minister determines that special circumstances exist which justify the granting of the licence notwithstanding the default ( section 34).
10. PPL is issued if a commercial petroleum discovery is made. This licence has an initial period of twenty (20) years when it is related to an oil field and thirty (30) years when it is related to natural gas. There is a single renewal period of up to ten (10) years, which can be applied for, if necessary.
11. Critically, exploration and petroleum production cannot occur without an application for an environmental permit/ authorisation issued by the Environmental Protection Agency under the Environmental Protection Act. In the case, the applicant must submit an Environmental Impact Assessment or Statement. The permit usually requires financial assurances such as insurance and a parent or affiliate company guarantee.

Currently, Exxon is the only PPL licensee with respect to developments underway in the Stabroek Block (Liza 1 and 2, and Payara). Exxon operates under a Stabroek Block Production Sharing Agreement (PSA) with the Government.

The Stabroek Block Production Sharing Agreement (PSA)  between the Government of Guyana, on the one hand; and Exxon, Hess and CNOOCC (all together the “Contractors”), on the other hand, is currently the only operational PSA under which the current floating production, storage, and offloading (FPSO) vessels highlighted in question 1 above are being operated.

Key features of the contract are the:

Financial Assurance provisions

1. The Contractors must provide an affiliated company guarantee or other form of Guarantee acceptable to the Minister of Natural Resources within 60 days of the initial period and thereafter, no later than ninety (90) days after the commencement of all subsequent work commitment periods. The guarantee must be in proportion to each of their corresponding undivided participating interests in the rights and obligations derived from the Agreement and for a combined amount of 10% of the budget submitted by the Contractor for each specific work commitment period.¹²

Profit Split and Royalties provisions

2. There is a 50/50 split of the Profits (the balance of Crude Oil and/or Natural Gas available in any month after “Recoverable Costs” have been satisfied) between the Government and Contractors. Recoverable Costs are investment costs  up to a ceiling of 75% of produced barrels in any month.¹³
3. The contractors are to pay Guyana royalties of 2% of the value of oil produced and sold (every quarter).¹⁴ This works out to Guyana getting approximately 14.5% of the value of the oil produced. After costs are recovered, Guyana’s share is expected to increase substantially.

Tax Exemptions

3. The Contractor is exempted from value-added and excise taxes, duty fees or import fees concerning income derived from petroleum operations, property held, transactions undertaken or activities performed for any purpose authorised or contemplated under the PSA. Taxes falling outside this category are not exempt.¹⁵
4. The Government is to pay the income tax and corporation tax owed by the Contractor. The appropriate portion of the Government’s share of the profits is to be accepted as payment in full of the Contractor’s share of income and profit levies except for specified charges. Payment of the same is to be made by the Government on behalf of the Contractor by the Minister to the Guyana Revenue Authority.¹⁶
5. No corporation tax is payable during the exploration period on income earned in Guyana, if the affiliated company or non-resident sub-contractor conducted business in Guyana for 183 days or less in any tax assessment year.¹⁷
6. There is no tax, duty, fee, withholding, charge or other impost applicable on interest payments, dividends, deemed dividends, transfer of profits or deemed remittance of profits from Contractor’s, Affiliated Companies’ or Non-Resident Sub-Contractors’ branch in Guyana to its foreign or head office or to Affiliated Companies.¹⁸
7. Expatriate employees of the Contractor, affiliate companies, and sub-contractors are liable to pay income tax on income earned in Guyana.¹⁹
8. Assignments under the agreement are not subject to capital gains tax; however, a fee of US$100,000 is payable upon approval of the assignment to the Government²⁰.

Domestic Supply of Crude Oil and Natural Gas Provisions

10. There is a domestic supply obligation in respect of crude oil and natural gas.²¹
11. Concerning crude oil, if the crude oil domestic demand exceeds the Minister’s total entitlement from all crude oil production in Guyana, the Contractor, together with third parties which produce crude oil in Guyana, is to supply and sell a volume of crude oil to be used for such crude oil requirements in Guyana, calculated on the basis of the ratio which the Contractor’s Lifting Entitlement of Crude Oil bears to the sum of Contractor’s Lifting Entitlement to crude oil plus the total entitlement of all other producers in Guyana. The volume of crude oil that the Contractor shall be required to sell under this Article shall not exceed the Contractor’s share of profit oil.
12. Concerning natural gas, if the natural gas domestic demand exceeds the Minister’s total entitlement from all natural gas production in Guyana, then the Contractor shall be obliged, together with any third parties which produce natural gas in Guyana, to supply and sell a volume of Natural Gas to be used for such Natural Gas Domestic Demand in Guyana, calculated on the basis of the ratio which the Contractor’s Lifting Entitlement of natural gas bears to the sum of Contractor’s Lifting Entitlement of natural gas plus the total entitlement of all other producers in Guyana. The volume of natural gas which the Contractor shall be required to sell under this Article shall not exceed the Contractor’s share of Profit Gas.

Local Content Provisions

13. In the conduct of petroleum operations, the Contractor must give preference to (a) the purchase of Guyanese goods and materials, provided that such goods and materials are available on a timely basis of the quality and in the quantity required by Exxon at competitive prices; and (b) the employment of Guyanese sub-contractors insofar as they are commercially competitive and satisfy the Operator’s financial and technical requirements.²²
14. Without prejudice to the right of the Contractor to select employees and determine the number thereof in the conduct of Petroleum Operations, the Contractor shall require Exxon to employ and contractually obligate sub-contractors to employ Guyanese citizens having appropriate qualifications and experience in the conduct of Petroleum Operations in Guyana.²³
15. During each year of the term of the Petroleum Prospecting License, or any renewal thereafter, the Contractor shall pay to a Government account for the Ministry of Natural Resources, US$300,000 to:

1. provide Guyanese personnel nominated by the Government with on-the-job training in Contractor’s operations in Guyana and overseas and/or practical training at institutions abroad;
2. send qualified Guyanese personnel selected by the Government on courses at universities, colleges or other training institutions;
3. send Guyanese personnel selected by the Government to conferences and seminars related to the petroleum industry; and/or
4. purchase for the Government advanced technical books, professional publications, scientific instruments or other equipment required by the Government.

The government has proposed new PSA terms in a model PSA agreement for the future.²⁴ Under this new agreement:

1. 10% royalty rate up from the 2% in the Stabroek PSA;
2. The 75% recoverable costs ceiling is lowered to 65%
3. The sharing of profit after costs recovered remains 50/50
4. A corporate tax of 10% is instituted, whereas there was none before.

At least six bidders have accepted these new terms concerning other Blocks²⁵.

Footnote(s):

¹² PSA, Article 3.2

¹³ PSA, Article 11

¹⁴ PSA, Article 15.6

¹⁵ PSA, Article 15.1

¹⁶ PSA, Article 15.4

¹⁷ PSA, Article 15.12

¹⁸ PSA, Article 15.11

¹⁹ PSA, Article 15.12

²⁰ PSA, Article 15.13

²¹ PSA, Article 17

²² PSA, Article 18

²³ PSA Article 19.2

²⁴ Shikem Dey, “ Four out of six bidders accept new Guyana PSA terms – Ministry” (  Oil Now, 17 October 2024) <https://oilnow.gy/featured/four-out-of-six-bidders-accept-new-guyana-psa-terms-ministry/> accessed 30 December 2024

²⁵ ibid

Currently, no unconventional hydrocarbon resources, such as shale gas, are being exploited.

There is no separate regime for unconventionals. Hydrocarbons are included in the definition of petroleum under the Petroleum Activities Act.

The key regulators in the oil and gas industry are:

1. The Government of Guyana: develops policies and legislation, builds capacity, and promotes governance
2. The Ministry of Natural Resources (MoNR): Includes the Petroleum Resources Governance and Management Project (GPRGMP) and is responsible for the administration of permits granted under the Petroleum Activities Act
3. The Environmental Protection Agency (EPA): A state agency that regulates the oil and gas sector by granting permits for various development activities in the sector. It oversees the management of the environmental impact of the various petroleum development activities through the monitoring of compliance with the permits issued.
4. The Department of Energy (DoE): State Agency responsible for managing the hydrocarbon industry ( underway) and maximising the benefits therefrom.
5. The Guyana Geology and Mines Commission (GGMC): A state agency responsible for planning and securing petroleum’s development, exploitation, and management. It also provides critical information on the industry.
6. The Local Content Secretariat: A unit within the MoNR responsible for administering the Local Content Act and its requirements.

The upstream oil and gas industry in Guyana is also regulated by laws and regulations such as The Income Tax Act, The Corporation Tax Act, The Property Tax Act, and The Income Tax and (In Aid of Industry) Act. Under the said tax Acts, the Guyana Revenue Authority is a regulator.

The government is directly involved in the upstream oil and gas industry to the extent of its regulation as outlined in question 5 above and its obligations and benefits under the production sharing agreements.

There is no government-owned oil and gas company involved in upstream activities.

Yes.  Restrictions vary with each licence.

Regarding general restrictions, there is a local content requirement under the Local Content Act (LCA). Local content means the monetary value of inputs from the supply of goods or the provision of services by Guyanese nationals or Guyanese companies and includes local capacity development.

Guyanese national means a citizen of Guyana (section 2).

Guyanese company means (a) any company incorporated under the Companies Act -(i) which is beneficially owned by Guyanese nationals who ultimately exercise, individually or jointly, voting rights representing at least 51% of the total issued shares of the company; and (ii) that has Guyanese nationals holding at least 75% of executive and senior management positions and at least ninety percent of non-managerial and other positions; or (b) any partnership between Guyanese nationals and a Guyanese company constituted in accordance with the Partnership Act (section 2).

Local capacity development includes increasing the number, competencies, and capabilities of Guyanese nationals or Guyanese companies participating in the petroleum sector (section 2).

The LCA mandates that oil and gas companies operating in Guyana prioritise hiring Guyanese workers, source goods and services from local businesses, and build the capacity of local talent.

All contractors, sub-contractors and licensees under a Petroleum Agreement are required to fulfil minimum local content requirements in relation to at least 40 subsectors (expected to increase via an amendment to the LCA²⁶), including transportation, accommodation, legal services, marketing, medical services, construction, waste management, food supply, engineering and machine services.  These are outlined in the first schedule of the LCA (see section 7).

The contractor, sub-contractor or licensee is to submit to the Secretariat all Master Services Agreement (a contract that facilitates an ongoing relationship between a service provider and a contractor, sub-contractor or licensee by detailing each party’s ongoing duties and obligations in relation to their petroleum operations) (sections 2 and 14).

Additionally, within 4 months of the grant of a licence, a transfer of the licence or execution of a petroleum agreement, the contractor or licensee must submit a Local Content Master Plan to the Minister with responsibility for petroleum (currently the Minister of Natural Resources) for approval.  The Sub-contractor must also submit a Local Content Master Plan to the Minister within 4 months of entering an agreement with a contractor, sub-contractor or licensee. The Minister will submit the master plan to the Local Content Secretariat. A modified plan may be submitted where a change in circumstances occurs, which was unavoidable and unforeseen at the time of submitting the Local Content Master Plan. (Section 8)

The master plan should include an employment sub-plan; a procurement sub-plan with local content as a bid criterion; a capacity development sub-plan; the quality and quantity criteria required for the supply of goods and the provision of services; and a statement on and estimate of the value of local content to be acquired, delivered and rendered for Guyana. (Section 9)

In addition to the Local Content Master Plan, contractors, sub-contractors and licensees must also submit an annual Local Content Plan within 60 days prior to the next calendar year but no later than within 30 days of the start of the new calendar year.

A contractor, sub-contractor or licensee must also provide local content reports to the Secretariat: one within 30 days after the end of each half-calendar year, outlining its compliance with the approved minimum local content levels, and the other within 45 days of the commencement of a calendar year outlining its performance in the local content activities it undertook in the previous calendar year (sections 12 and 17).

The Secretariat, within 45 days after the receipt of the yearly performance report, will review and assess the report to ensure compliance with this Act (section 17).

A contractor, sub-contractor or licensee may be subject to auditing by the Secretariat. Therefore, it is essential that contractors, sub-contractors or licensees properly document all data on local content (section 16).

Footnote(s):

²⁶ OilNOW, “ Guyana likely to amend Local Content law this year” ( OilNOW,  17 April 2024) <https://oilnow.gy/featured/guyana-likely-to-amend-local-content-law-this-year/> accessed 2 January 2025.

The Environmental Protection Agency is responsible for providing permits, approving EIAs and monitoring permits for petroleum development activity Environmental Protection Act (EPA).

In Guyana, upstream oil and gas activities require an environmental permit (see question 2). However, before obtaining the permit, Environmental Impact Assessments (EIA) is required. Under the EIA and the permit, the environmental health requirements for oil and gas include regulation of greenhouse gas emissions, waste management, spill prevention, and monitoring, with a focus on protecting marine ecosystems, local communities, and biodiversity.

Generally the EIA must identify, describe and evaluate the direct and indirect effects of the proposed the petroleum development and exploration project on the environmental including:-   human beings; flora and fauna and species habitats; water; soil; air and climatic factors; material assets, the cultural heritage and the landscape; natural resources, including how much of a particular resource is degraded or eliminated, and how quickly the natural system may deteriorate;  the ecological balance and ecosystems; the interaction between the aforesaid factors listed above; and any other environmental factor which needs to be taken into account or which the Agency may reasonably require to be included ( see section 11 of the EPA).

Each EIA and resulting permit is unique to the petroleum development to be undertaken. At minimum, in the EIA, companies must be expected to demonstrate plans to minimise environmental impacts (including socio-economic impact) throughout the exploration, development, and production phases, including measures to mitigate potential risks (direct and indirect) to air, water, soil quality, humans and all other factors listed under section 11 of the EPA, which is outlined in paragraph 3, immediately above.  Such plans should address development drilling operations; Subsea Umbilicals Risers and Flowlines (SURF) and Floating Production, Storage, and Offloading (FPSO) installation; oil and gas production operations; logistical support, and decommissioning.

Yes.

See answer to question 3 concerning (a) benefits to the Government of Guyana under the Petroleum Share Agreement (PSA); and (b) the are various tax deductions and incentives offered under the PSA to Contractors.

General, further and any new information on Investment incentives in Guyana can be found on the following websites:

• Guyana Office for Investment:  http://goinvest.gov.gy/investment/investment-guide/ 
• The National Procurement & Tender Administration (NPTA):  http://www.npta.gov.gy/ 
• National Industrial & Commercial Investment Limited: http://www.privatisation.gov.gy/
• Ministry of Finance: https://finance.gov.gy/procurements  

Yes. Guyana does not explicitly restrict the export of oil and gas produced within its territory. The key restriction is the Local Content Act, as questions 3 and 7 above explain.  Under this restriction, there is an indirect limitation on exports in the industry because the local content restriction requires more local involvement in operations, namely sourcing local goods and services instead of foreign goods and prioritising Guyanese workers.

Export is also restricted to the extent that there is a requirement to supply Guyana’s domestic market with crude oil and natural gas. See the answer in question 3 above.

Yes. The Petroleum Activities Act 2023 (Part IX – sections 56-61) addresses decommissioning. Specific decommissioning obligations of the licensee include the following:

i) Sole responsibility for the removal of all property used in petroleum operations from the affected area, and remediation of the affected area in accordance with best industry standards following expiration, surrender or termination of its licence. (section 56)

ii) Submission of a proposed decommissioning plan and budget to the Minister for approval, no later than two years before the expiration of the petroleum exploration licence; or no later than two years before the cessation of production under the petroleum licence. (section 57)

iii) Responsibility for temporary and permanent plugging and abandonment  of wells. (section 60)

iv) Establishment of a decommissioning fund for the purpose of ensuring adequate funding to implement decommissioning operations. (section 61)

The Act also sets out requirements for:

i) the contents of the decommissioning plan which may include options for complete and total removal of all wells, facilities and assets used in the conduct of petroleum operations, partial removal, removal in place or decommissioning of offshore platforms and other facilities for use as reefs or any other applicable purpose, reuse or relocation of the facility for use in petroleum operations at another location or alternative petroleum infrastructure for purpose other than petroleum operations.

The decommissioning plan is statutorily required to include: (i) a detailed description of the decommissioning operations to be undertaken by the licensee, (ii) a description of the proposed methods of removal and disposal, (iii) an analysis of alternative  removal and disposal  methods considered in preparing the plan, including cost estimates and the rationale for selecting the preferred methods, (iv) an environmental impact assessment in compliance with the Environmental Protection Act and (v) any other matter that may be prescribed by regulation or direction of the Minister responsible for petroleum.

ii) approval of the decommissioning plan by the Minister responsible for petroleum, who when deciding whether to approve or reject a decommissioning plan must take into consideration safety and environmental factors, technical and economic aspects, disposal alternatives, impact on development of other petroleum operations or source of energy, impact on local communities, fisheries and agriculture and other national interests.

Construction and operation of offshore and onshore oil and gas pipelines are regulated by the following legislation:

i) The Petroleum Activities Act sections 6 and 66 which give the Minister responsible for petroleum authority to grant pipeline operation licences, inclusive of rights of way through national territory for operation, transportation and storage of petroleum by pipelines, under such terms and conditions as prescribed by guidelines. These guidelines are still in the draft stage.

A production licence or petroleum agreement may confer rights to operate, transport and store petroleum via pipelines, subject to said rights being incorporated into a development plan approved by the Minister responsible for petroleum. Key elements of this development plan and intended terms and conditions of the draft guidelines are that applicants must submit: source of gas, its intended route and destination, use/purpose and environmental and community impacts.²⁷

ii) Section 4(d) of the Guyana Energy Agency (Petroleum and Petroleum Products) Regulations (GEA Petroleum Regulations)²⁸ made under the Guyana Energy Agency Act which requires a licence from this Agency for the transport of petroleum and petroleum products in bulk quantities whether by land, air or sea. See also question 15 below.

iii) The Environmental Protection Act section 11 which requires the developer of any project involving the extraction and conversion of mineral resources to apply to this Agency for an environmental permit; application may be subject to an environmental impact assessment if the EPA determines that the project may significantly affect the environment. See questions 2 and 8 above.

Footnote(s):

²⁷ According to the Legal Officer – Ministry of Natural Resources – interview, 3 January 2025

²⁸ Guyana Energy Agency (Petroleum and Petroleum Products) Regulations 2024 https://gea.gov.gy/wp-content/uploads/2024/05/OFFICIAL-GAZETTE-APRIL-27-2024-LEGAL-SUPPLEMENT-B_compressed-1-1.pdf

The GEA Petroleum Regulations section 53 makes provision for a general duty about safe handling and disposing of petroleum and petroleum products. A regulatory regime for LNG liquefaction will also be subject to relevant licensing and inspection requirements pursuant to the Environmental Protection Act (see questions 2 and 8 above).

There is currently no specific regulatory regime applicable to LNG liquefaction in Guyana. LNG is not yet produced in the jurisdiction, however ‘an ExxonMobil-led liquid natural gas (LNG) development could be a possibility, with further assessment of what lies in Guyana’s Stabroek Block.’²⁹

There are no terminals for receiving LNG in Guyana. However, a gas-to-energy project is presently in development.³⁰

A specific regulatory regime for LNG liquefaction may be contained in the regulations of the Petroleum Activities Act, which is still in the draft stage.³¹

Footnote(s):

²⁹ oilnow.gy – ‘Exxon could pursue potential LNG development offshore Guyana once gas resource is fully understood’ –  September 14, 2024 https://oilnow.gy/featured/exxon-could-pursue-potential-lng-development-offshore-guyana-once-gas-resource-is-fully-understood/

³⁰ oilnow.gy – ‘Guyana taps Fulcrum LNG to partner with Exxon, government on gas development’ – June 21, 2024 https://oilnow.gy/featured/guyana-taps-fulcrum-lng-to-partner-with-exxon-government-on-gas-development/

³¹ According to the Legal Officer – Ministry of Natural Resources – interview conducted 3 January 2025

Non-LNG gas storage is regulated by the GEA Petroleum Regulations. According to section 4 (f) of these regulations, a storage licence must be issued by the Guyana Energy Agency for a person to possess or store petroleum or petroleum products in bulk quantities i.e. an aggregate of quantity of 2000 litres or more of petroleum or petroleum products except for liquefied petroleum gas, where 800 litres or more is deemed to be a bulk quantity.

The storage licence is issued in conjunction with licences for import, wholesaling, or bulk transport of petroleum or petroleum products, subject to the satisfactory fulfilment of all conditions and requirements by the Guyana Energy Agency regarding safe handling, storage and conveying of petroleum and petroleum products.

The regulations set out the criteria for granting of the licences, and the fees vary depending on the type of other licence with which the storage licence is issued, and the duration of the licence.

Yes. There are gas storage facilities in Guyana. Such facilities belong individually to the companies which import and distribute gas products.

The Guyana Oil Company Limited (Guyoil) – the state-owned entity responsible for import, storage and distribution of gasoline, diesel, kerosene, heavy fuel oil and aviation turbine fuel – has storage facilities for the products they import and distribute.

Privately operated businesses in the downstream gas market also have storage facilities e.g. Rubis (Guyana) Inc.³² and Sol Guyana Inc.³³ which import gasoline and diesel, and Massy Gas Products (Guyana) which imports liquefied petroleum gas (LGP), nitrogen, oxygen and other gases. These companies have storage facilities for the products they import and distribute.

The Guyana Power and Light Inc. – the state-owned electricity company – has storage facilities for the heavy fuel oil it uses/imports.

All existing storage facilities are used for day-to-day supply to the market, and some importers receive shipments of petroleum products as often as every three days. There is no third-party storage facility for excess or reserve gas or gas products.

Footnote(s):

³² RUBIS acquired the assets owned and operated by Chevron under the Texaco brand in the Eastern Caribbean and operates in Caribbean territories including Antigua, Barbados, Dominica, Grenada, Guyana, St Lucia, St Vincent and Suriname – https://www.rubis-caribbean.com/about/

³³ Sol Guyana Inc. markets and distributes gas products for Shell, Esso and Mobil – https://solpetroleum.com/products-services/retail-fuels/

Yes. There is a gas transmission and distribution system in Guyana. Gas and gas products are delivered to the jurisdiction by marine gas transportation vessels which offload the products to the importers’ storage facilities, which are directly accessible by the vessels. Importers either distribute directly to their own retailers using tanker trucks, or barges depending on delivery location; or external wholesale purchasers with their own transportation may uplift gas products from the storage facilities of importers for transportation to their respective sale/use locations.

Ownership of gas distribution and transmission infrastructure (storage facilities, access to marine gas transportation vessels (wharves), tanker trucks and barges) in Guyana is divided between the state-owned Guyoil, and privately operated companies. Each entity owns and operates its individual infrastructure for gas distribution and transmission.

Current gas distribution and transmission operations are regulated by the Guyana Energy Agency³⁴ which is the government agency responsible for licensing of: import of petroleum and petroleum products, operation of wholesale or retail sales business, transport of bulk quantities, operation of consumer installation and storage.

This Agency also monitors licensees for adherence to various duties including duties in respect of mixing or blending of petroleum and petroleum products, safe handling and disposing of the same, buildings, roadworks, structures and plants, approval of specifications and standards, fires, fire precautions and spills.

Duties and powers to inspect operations of licensees are also vested in the Guyana Energy Agency. Persons who contravene relevant obligations of the GEA Petroleum Regulations may be subject to criminal prosecution and fines upon conviction.

At present, there is no pipeline system for gas transmission and distribution in Guyana. However, upon implementation of a pipeline system, the regulations as aforementioned will apply as applicable.

If there is excess capacity in the pipeline, the Petroleum Activities Act section 66(2) gives the Minister responsible for petroleum the authority to direct that an owner or operator of a pipeline facility grant access to third parties for resource management, investment risk, and other national interest considerations.

EPA licensing and monitoring may also be applicable to distribution and transmission operations provided that said operations are required to be licensed in accordance with section 21 of the Environmental Protection Act, which stipulates that a permit from this Agency must be obtained in order to construct, alter, extend or replace any plant, structure, equipment, apparatus, mechanism or thing that may discharge or from which may be discharged a contaminant into any part of the natural environment.

Footnote(s):

³⁴ Under the Guyana Energy Agency (Petroleum and Petroleum Products) Regulations 2024 (see footnote 29).

Guyana does not have oil refinery facilities; therefore, the downstream market mainly consists of import, marketing and distribution of end products to consumers. Within this context, there is a competitive downstream gas market. As stated above at question 14, Guyoil is the state-owned company involved in the downstream gas market, but there are also private companies which supply gas and gas products to the market. Customers can choose their supplier.

The downstream gas market is regulated by the Guyana Energy Agency³⁵ (GEA), a statutory body-corporate which issues licences for import, storage and distribution of petroleum and petroleum products. See question 15 above.

The downstream gas market is also subject to requisite licensing and monitoring/inspection of operations by the EPA.

Footnote(s):

³⁵ Guyana Energy Agency – https://gea.gov.gy/about-us-2/

Yes. Since the commencement of oil production, the following legislation has been implemented with respect to the oil and gas industry:

i) The Local Content Act, passed on 29 December 2021 (addressed in detail in questions 3 and 7 above) which requires all contractors, sub-contractors and licensees under a Petroleum Agreement to fulfil minimum local content requirements in relation to at least 40 sub-sectors to date, with expected increase upon impending amendment to this Act. See question 7 above.

ii) The Natural Resource Fund Act, passed on 29 December 2021. The main objective of this Act is to establish the Natural Resource Fund, a public fund to manage the natural resource wealth of the jurisdiction. The main contributor to the Natural Resource Fund thus far has been oil revenues.

iii) The Petroleum Activities Act, passed on 9 August 2023 (which repealed and replaced the Petroleum (Exploration and Production) Act and the Petroleum (Production) Act. This Act defines the powers and duties of the Minister responsible for petroleum and sets out the requirements for application and granting of various licences for petroleum related activities. This legislation inter alia addresses exploration, development and production of petroleum, decommissioning, transportation and storage of petroleum by pipelines, disposal of petroleum and carbon dioxide storage. See question 2 above.

Regulations, including oil spill, pipeline and LNG liquefaction regulations under the Petroleum Activities Act are also in the draft stage. The regulations under the Petroleum (Production) Act Cap 65:05 remain in force for the time being until the new regulations under the Petroleum Activities Act are passed.

iv) The Guyana Energy Agency (Petroleum and Petroleum Products) Regulations, passed on 27 April 2024. See question 15 above.

With specific respect to the Russia/Ukraine war, this situation has not posed any challenges to the oil and gas industry in Guyana. It has not affected the supply chain, and the industry has benefited from increased oil prices and increased demand for Guyana crude from Europe.³⁶

Foreseeable challenges regarding international geopolitics include possible changes to federal licensing of oil and gas lands by the recently elected administration of the United States government. If licensing restrictions are lifted, this may cause a drop in global oil and gas prices, which may in turn affect production revenues for Guyana.³⁷

The ongoing Guyana-Venezuela border dispute has not thus far impacted Guyana’s oil and gas industry.³⁸

Footnote(s):

³⁶ According to the Legal Officer of the Ministry of Natural Resources – interview conducted on 3 January 2025.

³⁷ Ibid.

³⁸ Ibid.

With respect to policy, Guyana has a comprehensive Low-Carbon Development Strategy (LCDS)³⁹ which details the government’s planned initiatives in this regard. The LCDS outlines the objectives of the government, including investing in clean energy, stimulating low-carbon growth, protection against climate change and biodiversity loss, and alignment with global climate change and biodiversity goals.

Chapter 6 of the LCDS is titled ‘Aligning With Global Climate Change Goals: Oil and Gas’, and highlights the government’s recognition that Guyana will need to align development of its oil and gas sector with global trends towards decarbonisation⁴⁰. To this end, the strategy states two objectives viz: ensuring a domestic low-carbon transition and participating in a global low-carbon transition⁴¹.

On the downstream end of the oil and gas industry, the LCDS details plans to move away from heavy fuel oil for electricity supply towards a combination of natural gas, hydropower, solar, wind and biomass energies⁴².

There is no specific legislation requiring reduction of carbon impact in the oil and gas industry. The Petroleum Activities Act section 91 does however restrict licensees under it from flaring, in accordance with specifications of their EPA licences⁴³. Licences relating to petroleum production also contain a general clause stipulating that licensees must conduct operations in accordance with good international petroleum industry practice⁴⁴.

There are currently no strategies or proposals relating to the production of hydrogen.

With respect to carbon capture and storage, the Petroleum Activities Act Part XII provides for the Minister responsible for petroleum to grant geological storage licences for carbon dioxide, subject to terms and conditions prescribed by regulations (which are in draft stage). This licence will grant the holder the right to explore for potential carbon dioxide storage sites, develop underground carbon dioxide storage sites, inject and store carbon dioxide and undertake operations incidental to carbon dioxide storage.

Footnote(s):

³⁹ Guyana Low-Carbon Development Strategy 2022 https://lcds.gov.gy/wp-content/uploads/2022/08/Guyanas-Low-Carbon-Development-Strategy-2030.pdf

⁴⁰ Ibid, page 85.

⁴¹ Ibid, page 86.

⁴² Ibid, page 47.

⁴³ See for example Uaru Petroleum Production Licence, part W at page 25 – https://petroleum.gov.gy/documents/uaru-petroleum-production-licence

⁴⁴ See for example ESSO Exploration Petroleum Production Licence, article 28.3 at page 91-

https://petroleum.gov.gy/documents/petroleum-prospecting-license-esso-exploration

Also, Whiptail Petroleum Production Licence, part U at page 26- https://eiti.gy/wp-content/uploads/2024/04/Whiptail_Petroleum_Production_Licence_11_April_2024_ExxonMobil_Guyana_Limited_CNOOC_Petroleum_Guyana_Limited_HESS_Guyana_Exploration_Limited1.pdf