Oil and gas development…Draft local content policy offers little or nothing to Guyanese - GCCI

Oil and gas development…Draft local content policy offers little or nothing to Guyanese – GCCI

Jun 14, 2017 News

By Abena Rockcliffe-Campbell
The Georgetown Chamber of Commerce (GCCI) is of the opinion that the Local Content Policy prepared by the Ministry of Natural Resources leaves much more to be desired. This policy is supposed to guide or set the stage for the quantum of locally produced materials, personnel, financing, goods and services that are to be rendered to the oil industry.
Oil-producing countries all over the world have local content polices.
Based on the review the GCCI prepared, the Chamber feels as if Guyana’s draft local content policy makes little provision for local business owners and Guyanese in general.
There are several areas where the GCCI found the draft policy to be lacking. GCCI’s discontent with the draft policy varies from the fact it states that there will be no regulations for local content and little provision is made for jobs for locals, to it not having enough objectives.
The policy seen by Kaieteur News included a foreword in the name of Minister of Natural Resources Minister, Raphael Trotman. Trotman noted that the policy will be developed over time, and in tandem with the growth of the industry. He also said, “At present, regulations will not be promulgated, but may become necessary as the industry unfolds and expands, and impetus is needed to steer the process or to solidify gains.”
GCCI has a problem with this. The Chamber thinks that regulation on local content should be promulgated earlier in the life cycle of oil and gas capacity development.
Further, GCCI said that the very objectives of the draft policy are lacking. The Chamber said that the objectives should include scalable development in priority areas in order to have local personnel and goods and services supplied to operators by a local business. The Chamber thinks that the policy should also set out to ensure operators and contractors from abroad have partnering systems to enable local companies and investors to learn about oil and gas industry and its supply needs.
Further, GCCI wants the policy to stipulate the hosting of awareness sessions to bring Guyanese up to date on their resources.

JOB CREATION
GCCI expressed the dismay over the fact that the policy states that little jobs both directly and indirectly will be derived from the oil and gas sector.
The body said that the language used in the policy tapers expectation.
“The fact of the matter is that once operators comply with legislation, locally, they will be forced to build capacity rather than optional adherence to the local content policy…Job opportunities are everywhere; via existing business who are sub-contracted to supply goods and services, now and in the future
Job areas that Guyanese can fill today but are not given the opportunities are: Able Body, Able Body unlimited, Riggers, Mess men, Chippers and Painters, Banksman, maintenance crewmember, pump men, cooks. These are all offshore jobs currently being done by foreigners and Guyana has to foot the bill.”
GCCI thinks that the policy language shows clear strategic drift away from provision of jobs.
“The reverse should be the case; the policy should push for jobs on the forefront of onshore activities and offshore activities. The supplier’s network will provide indirect employment once they form part of the supply chain. With this policy/legislation might be more palatable to Guyanese,” the review stated.
Also GCCI thinks that the policy should speak to the University of Guyana being a body to run courses and certification with link to international bodies that perform certification of workers for the oil industry.

IMPLEMENTATION STRATEGY
GCCI is of the opinion that the policy’s entire implementation strategy needs to be re-worked. “It does not spell out priority areas, near term initiatives, medium term GAP development areas, long term structural improvement of the state and programs to enable private sector to function as a core network of the suppliers to serve the industry.”
The GCCI, in its response to the Ministry of Natural Resources noted that the private sector companies either in supply of goods and services, wharfing onshore facilities, etc., can be beneficiaries in the early stages of seismic testing, drilling, well development and pre-production set up. It said too that after production starts, the government benefits from royalties. The government can benefit from tax revenues once routing of supplies and services are done via Guyana and not anywhere else.

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