Oil and Gas Task Force chairman Public Infrastructure, Industries and Commerce Minister Jackson Ngiraingas the legal framework is expected to be completed by the end of the month.
The consultations are on the revenue sharing provision, management of revenues, environmental laws, and petroleum regulations among others.
“The legal framework will be completed this month with the help of World Bank,” Ngiraingas said.
The World Bank has been providing Palau with technical assistance to support the design of the petroleum sector legislation and regulatory framework.
The support was obtained from World Bank during former president’s Tommy Remengesau’s administration.
The task force’s report will include the development of a hydrocarbon code and model agreement; development of petroleum operations regulations; development of environmental regulations for petroleum operations;and development of hydrocarbon tax regulations.
The report will also be the basis of a piece of legislation that will establish the oil and gas sector.
Although Sen. Adalbert Eledui, member of the Task Force and also chair of the Senate Committee on Resources and Development introduced a version of the measure, he said earlier that it will be combined with the legal framework.
The new measure gives the national government and state government the authority to approve licenses to conduct petroleum exploration and extraction as long as activities was awarded through a public bidding process to be administered by the Ministry of Natural Resources, Environment and Tourism.
The bill covers proposed sections on developing petroleum regulatory policies, rules and regulations for exploration.
The bill also places the exclusive ownership rights to each state to any oil or gas resources found in the area from land to 12 nautical miles seaward from traditional baselines.
The measure also tasks the Ministry of Natural Resources, Environment and Tourism to set the minimum and maximum royalty rates for both the national and the state governments.
The oil agreement executed between Palau Pacific Energy Exploration and the national government pegs at 12.5 percent.
The framework will according to the consultations will take into account Constitutional and existing laws pertinent to the oil and gas sector, most particularly, those relating to the environment, financial oversight, taxation, auditing, procurement and general executive and legislative oversight and management.
The legal framework is much anticipated due to the signing of the oil agreement with a foreign firm by President Johnson Toribiong even before a legal framework is put in place.
