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Geographic, Economic and Political Factors In Guyana

The following description of carrying on business in Guyana is taken from publicly available information provided by the Guyana Office for Investment. 

Guyana is situated on the northern coast of the South American continent, with its southern half forming part of the Amazon Basin. It is bounded on the north by the Atlantic Ocean, on the east by Suriname, on the south-west by Brazil and on the north-west by Venezuela. Guyana’s total area is approximately 215,000 km2, slightly smaller than Great Britain. Its coastline is approximately 4.5 feet below sea level at high tide, while its hinterland contains mountains, forests, and savannahs. This topography has endowed Guyana with its extensive network of rivers and creeks as well as a large number of waterfalls; however, surface access in Guyana is limited to the dry season which runs from October to March.

Guyana is endowed with natural resources including fertile agricultural land and rich mineral deposits (including gold, diamonds and semi-precious stones, bauxite and manganese).

The country is divided into three counties (Demerara, Essequibo and Berbice) and ten Administrative Regions. Georgetown is the capital city of Guyana, the seat of Government, the main commercial centre and the principal port. In addition to Georgetown, Guyana has six small towns of administrative and commercial importance which are recognized municipal districts; each with its own mayor, council and civic responsibilities.

The Co-operative Republic of Guyana is an independent Republic headed by the President and National Assembly. The most recent elections were held in November 2011 in which the People’s Progressive Party was re-elected as a minority government. Guyana is a member of the British Commonwealth of Nations, with a legal system based for the most part on British Common Law. English is the official language of Guyana and is the language of education, commerce and government.

The Regulatory Regime in Guyana

Under the petroleum act of Guyana (the “Guyana Petroleum Act”), petroleum agreements (“PAs”), and associated PPLs, for petroleum exploration in Guyana are executed by, and subject to the approval of, the Minister Responsible for Petroleum. At the present time, this is His Excellency the President. Within Guyana, subsurface rights for minerals and petroleum are vested in the State. PAs may address the following matters: (i) granting of requisite licences; (ii) conditions to be included in the granting or renewal of such licences; (iii) procedure and manner with respect to the exercise of Ministerial discretion; and (iv) any matter incidental to or connected with the foregoing.

The Guyana Geology and Mines Commission (“GGMC”) is the statutory body responsible for administering PAs and PPLs for petroleum exploration in Guyana. The GGMC has been charged with the responsibility for managing the nation’s mineral resources.
In order to obtain a PPL, the prospective licencee must:

  • submit a PPL application to the Minister Responsible for Petroleum, including a detailed annual work program and budget; and

  • agree to comply with licence conditions stipulated by the Minister, including conditions stipulated in the applicable governing PA.

A PA and an associated PPL enable the holder to conduct prospecting and exploration activities for petroleum on the subject property in accordance with the terms and conditions of such PA and PPL. A PPL is issued for an initial period not exceeding four years, and is renewable for up to two additional three-year periods. In the event of a discovery, the holder may apply for a twenty-year PPL, renewable for a further ten years.

In order to obtain a PPL, the licencee must:

  • be in possession of a valid PPL (unless otherwise permitted by the Minister); and

  • submit an application for a PPL within two years of the declaration of a discovery or within such other time frame as stipulated by the Minister. The application must include detailed proposals for the construction, establishment and operation of all facilities and services for and incidental to the recovery, processing, storage and transportation of petroleum from a production area (and such other matters as are required by applicable regulations).

The granting of a PPL is subject to the applicant satisfying conditions regarding the following: (i) efficient and beneficial use of petroleum resources; (ii) adequate financial resources and technical and industrial competence and experience; (iii) ability and willingness to comply with the conditions on which the licence is proposed to be granted; (iv) proposal for the employment and training of citizens of Guyana; (v) procurement of goods and services obtainable within Guyana; (vi) exercise of any option given to the Government of Guyana to acquire an interest in any venture for the production of petroleum, on stipulated terms or terms to be agreed; and (vii) in the event of default, determination by the Minister Responsible for Petroleum that special circumstances exist which justify the granting of the licence notwithstanding the default.