Draft local content framework… Joint ventures are best way to transfer knowledge to local firms

Draft local content framework… Joint ventures are best way to transfer knowledge to local firms – Energy specialist

Sep 09, 2017 News

Energy specialist, Anthony Paul

With the emerging oil and gas industry, Guyanese are interested in how they can benefit. But, it is clear that the majority of locals do not possess the knowledge and competencies like foreigners in the industry.
According to the Principal Consultant of the Energy and Strategy Association of Caribbean Energy Specialists Ltd., Anthony Paul, the best way to transfer such knowledge is through joint ventures formed between local companies and foreign companies wanting to do business here.
Paul made this comment during a stakeholder engagement on the draft local content policy framework on Wednesday last, at the Marriott Hotel.
He explained that the oil and gas industry is more of a business than operations. He said that businesses need to have a strategy, including business development, procurement, contracting, analysis and design – activities that tend to occur in the head offices of companies.
“We need to build those fiscal skills in our communities. The oil and gas industry has some of the best companies in the world. Not just the best oil companies; the best companies in the world… Exxon, Halliburton. These are world-leading companies, and they are not world-leading only in operations, they are world-leading in how they train and develop people, how they procure goods and services, how they manage projects, how they manage contractors.”
He said that these aspects of business have to be learned so that the local companies can build themselves. For example, by taking raw materials and capturing more value from them.
“What local content tries to do is to capture some of that knowledge and transfer it to local individuals and firms as well.”
Paul said that this procedure adds value in creating sustainability, as revenue enters the economy by locals that work for the joint venture firms. He said that the sustainability is possible because the competencies are transferrable to any sector, analysis, development strategy, contracting, procurement and contract management.
“That’s why we invite foreign companies, because we don’t know to do things ourselves; because we don’t trust ourselves to do it. If we can learn from the industry and do those things ourselves, then we can take that into the broader economy and build that, and that is the heart of the rationale for creating joint ventures.”
Paul explained that under the joint venture structure, knowledge is transferred, because the partners have the right to ask questions and see how activities happen.
“That to me is a great path for us now. If we can build those things we can create more jobs in Guyana, create more revenues for the government, because now we would have gone up the scale in quality, internationally.”
Commenting on the issue was Attorney-at-Law, Charles Ramson Jr. He gave a practical example whereby he recently visited Qatar, who just reduced their percentage of ownership to 51 per cent.
“The provision of local content businesses is 51 per cent. And there are many other countries that have taken that kind of (position). Now, I am not suggesting that we move to that high of a percentage, and the reason why I’m not suggesting that is because it creates inefficiencies, and any sensible economist would tell people that those inefficiencies would cause you to have less revenue. But the second reason is that, it also operates as disincentives for investments and we don’t want that.”
Further, he said that since Guyanese do not have the expertise in oil and gas, the country has to ‘farm-in’ the relevant expertise. “Through that farming-in and making foreign companies engage with Guyanese businesses by law, will mean that we are in effect getting a mentorship programme, and through the years we will be able to develop our own capacity.”

Discover more from Kaieteur News

Subscribe to get the latest posts sent to your email.

Latest News