Local participation, environmental compliance non-negotiable in new Guyana petroleum deal

The signing of the agreement on Tuesday

Local participation, social development contributions, and compliance with environmental and safety obligations are non-negotiables in Guyana’s latest petroleum agreement.

Director of the Local Content Secretariat and Legal Officer at the Ministry of Natural Resources, Michael Munroe, reinforced this point on Tuesday.

He described the signing of the shallow-water Block S4 Production Sharing Agreement (PSA) as the dawn of a new era in Guyana’s petroleum industry, strengthening the country’s regulatory and fiscal framework. Guyana signed the PSA with QatarEnergy, TotalEnergies, and PETRONAS.

Munroe noted the competitive bidding process was conducted transparently, with clear criteria for technical, financial, and safety standards. “As you would appreciate, over the years, the government would have communicated clearly that some arrangements are non-negotiable, and we would have stipulated clearly that the fiscal arrangements which were being offered were non-negotiable,” he said.

He added that the government was pleased with how the consortium conducted negotiations. “It means that there are opportunities on the horizon for locals to participate meaningfully as the government moves to advance our bases.”

Munroe highlighted several reforms, including a 10 percent corporate tax and penalties for non-completion of work programmes. “The government wants participants in this basin to be aggressive in executing their work programmes. If you are unable to complete the programme, there will be a penalty. There’s also a new range of fees that the contractor would have to pay, and these are to some extent non-negotiable,” he said.

He also noted provisions for decommissioning obligations and hub framework development to support long-term sustainability and described the consortium’s diversity as a symbol of global confidence in Guyana’s offshore basin.