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Guyana cracking down on ‘rent-a-citizen’

June 11, 2024

GEORGETOWN, Guyana, CMC – The Guyana government says it is intensifying its crackdown on nationals involving in what it in the practice of “rent-a-citizen” or “fronting” in a bid to overcome the policy of Local Content within the petroleum industry.

In a statement, the Ministry of Natural Resources, through the Local Content Secretariat, said prevalent mainly in cases of joint ventures (JVs), “rent-a-citizen” or “fronting” refers to the unethical practice where foreign companies use local individuals or local entities as mere fronts to meet local content requirements, while the actual control and benefits remain with the foreign entity.

“This practice undermines the objectives and spirit of the Local Content Act, which aims to ensure that the citizens of Guyana benefit meaningfully from and participate actively in the nation’s natural resources sector,” the government said.

It said to address these issues, the Irfaan Ali government is actively pursuing measures to curb instances of rent-a-citizen.

It said one of the steps being taken is enhancing the collaboration with the Guyana Revenue Authority (GRA), adding “this closer working relationship aims to identify and penalise those engaging in fronting, ensuring that all stakeholders adhere to the legal and ethical standards set forth by the Local Content Act.

“The ministry remains committed to fostering a transparent and equitable petroleum industry that benefits all Guyanese. We urge everyone to support these efforts and uphold the integrity of our local content framework,” it added.

Meanwhile, the government says it has taken a definitive step towards conducting its own 3D seismic study of the oil blocks offshore Guyana, ahead of the upcoming oil blocks bid round that is planned for later this year.

A notice issued by the Natural Resources Ministry, said Guyana is seeking a reputable and experienced firm to conduct a “3D Multi-Client Seismic Survey” in the Exclusive Economic Zone (EEZ) offshore Guyana.

According to the government, the firm that is eventually contracted will be required to acquire, process and interpret the 3D seismic data, with a view of paving the way for exploration and the development of oil and gas resources offshore.

Additionally, the firm will be required to ensure “high-quality seismic data is available for effective evaluation during future bidding and licensing rounds.” Bids must be submitted by June 20, 2024.

The ministry also noted that for a firm to be eligible for the assignment, “the firm will be an internationally recognised firm with prior experience successfully completing three similar assignments/contracts at least 12 years prior to the application submission deadline.”

Regarding the upcoming auction of the oil blocks, the government said it wants to hold later this year, it first has to complete ongoing processes with the bidders from last year’s licensing round.

The bidding round, which was launched in December 2022, closed off in September 2023 with six companies bidding on eight of the 14 blocks offshore that were up for grabs. In total, there were 14 offers made on those blocks – two deep-sea blocks and six shallow-area blocks.

Among those awarded oil blocks during the bid round was a Guyanese-led company, Sispro Inc., which received a shallow block (S3) and a deep-water block (D2). Other shallow blocks were awarded to Total Energies EP Guyana BV, in consortium with Qatar Energy International E&P LLC and Petronas E&P Overseas Ventures Sdn Bhd (Malaysia), which got Block S4; Liberty Petroleum Corporation of the United States and Ghana-based Cybele Energy Limited, which got Block S7; and International Group Investment Inc. of Nigeria, which got two blocks – S5 and S10.

Another shallow block, S8, was awarded to the Stabroek Block partners: ExxonMobil Guyana Limited, Hess New Ventures Exploration Limited, and CNOOC Petroleum Guyana Limited.

The second deep-water block – D1 – was awarded to Delcorp Inc. Guyana, which comprises Watad Energy and Communications Limited and Arabian Drilling Company of Saudi Arabia.
The government said it wants to see uniformity in the non-fiscal terms of the contracts these oil block awardees will eventually sign, so that all the oil contracts have the same conditions.

The government had recently indicated that they are clearing the way for the consortium of TotalEnergies, QatarEnergy, and PETRONAS to move on to the negotiation phase of the contract award, the only awardee from the 2022 oil blocks’ auction that has reached this stage so far.

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