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Guyana must avoid simply mimicking other country’s local content policies
…Chatham House urges emerging oil producer to do gap analysis
By Kiana Wilburg
Too often, local content policies are designed without sufficient consideration of the resources available nationally and the changing nature of these resources. They are also done without co-operation with partner companies.
It is in this vein that Chatham House is calling on Guyana to be cautious in its design of a local content policy. It stressed that in the haste to have such a policy, Guyana’s authorities must avoid simply mimicking other countries’ local content policies.
It is urging Guyana and other emerging oil producers to first develop a “thorough understanding” of the local context. This would include the scale of discoveries, availability of skills and infrastructure, availability of oil/gas in country, etc.
The global organization said that Governments should then assess what skills will be needed through the lifecycle of the project(s). It said that this can be done in collaboration with foreign oil companies. The organization stressed that this assessment should be the basis for defining local content policy and targets that would be realistic and achievable.
Once this is done, Chatham House said that the government should focus next on capacity-building by requiring investors to develop the workforce and the supply base.
It said, “For many emerging producers, the starting point in terms of demands on foreign oil companies should be local sourcing of simple on-site services – construction and consumables for workers, for instance. They should avoid the delivery of turnkey projects run by foreign staff.”
Further to this, Chatham House said that governments of emerging oil producing nations must facilitate foreign oil companies’ efforts to develop the local supply industry and workforce. Specifically, Chatham House said that the government should link local content policy in the oil sector to its broader education strategy and build the kind of workforce that is able to respond to the country’s future needs.
LOCAL CONTENT POLICY STATUS
Business Minister, Dominic Gaskin
Business Minister, Dominic Gaskin, has acknowledged on several occasions that Guyana’s Local Content Policy should have been completed a long time ago. He noted however that there are certain challenges, which are affecting the process to finalize the document.
The most significant, he said, relates to finding the funds to pay a consultant to complete the task.
Gaskin said, “When we took on the job of finishing this document, we did not budget for it. It was handed to us in early 2018, months after we had put together our budget. When we got it, the contract with Trinidadian Oil Expert, Anthony Paul, came to an end.
“Paul fulfilled his terms. We are in need of a consultant. But we just don’t have the funds.”
The Business Minister said that he is now looking to the Ministry of Finance or international aid to help fund finalization process for the policy. He also emphasized that ExxonMobil would not be approached for funds.
In the meantime, Gaskin said that several stakeholders such as the Georgetown Chamber of Commerce and Industry (GCCI) were consulted on the second draft policy. He said that the Chamber is supposed to make a presentation to the Business Ministry on their amendments for the second draft.
“But in the absence of a Local Content Policy, I don’t think our businesses need to be scared or fearful that countries are going to come and hijack everything. I am not paranoid about it and they don’t have to be. Don’t think all foreigners are your enemies. People will go where there are opportunities and we need to start doing the same thing and be aggressive…”
Gaskin assured that the Local Content Policy will be ready in early 2019.
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