Guyanese lost US$440M in absence of Local Content Law - Ramson

Guyanese lost US$440M in absence of Local Content Law – Ramson

Oct 08, 2018 News

There are several issues in the oil and gas industry that are technical or can be deemed intricate. Therefore, Attorney-at-law, Charles Ramson said that most can understand the hard time being experienced by the APNU+AFC Government in addressing some oil related issues. In fact, Ramson said that the measures that government needs to take to secure local content for its people are fairly simple, “but they are still failing with even that.”
The Oil and Gas Consultant said that there is no reason why Guyana should have found itself a year and a half away from oil production but is still without Local Content legislation, or a policy at the very least. He maintains that that is one of the government’s biggest failures thus far.

Attorney-at-law, Charles Ramson

Ramson, who has a Masters’ Degree in Oil and Gas Management, noted that most oil producing countries across the world have Local Content Legislation. He said that there are quite a few countries that are still gearing for oil production years down the line but already have such legislation in place.
Further, Ramson, who recently returned from an oil and gas course at the University of Oxford, pointed out that many countries have ring-fenced particular goods and services to be procured by oil companies operating there, “meaning those companies can only buy the items from locals.”
Ramson said that such measures allow for the direct injection of money into the local economy. Also, the Oil and Gas Consultant said that it forces foreign business to partner with locals “because where we are lacking the expertise, which may be certification or the transfer of knowledge and technology—it forces foreign supply companies to come on board.”
Ramson said that in countries that have ring-fenced goods and services, services like security is secured for locals and food stuff are bought locally.
“We have foreign helicopter services, but guess what? That could have been a partnership. That is what I am saying; legislation to secure these things is what Guyana needs. It forces partnerships where businesses can benefit, we need that transfer of knowledge, technology and so on, but that can only happen through legislation.”
Ramson said that a large share of the money that could have gone into the economy from Liza Phase one has already slipped through the fingers of Guyanese.
He said that Guyana’s Local Content Legislation could specify that, at minimum, 10 percent of the cost for any project should be injected into the local economy.
Ramson posited, “If we only had 10 percent of Liza Phase one spending in the economy between now and 2020, it would be equivalent to US$440M or GY $90B.”
He added, “You then have to consider the multiplier effect on that and add another 1.5 percent. So here we are talking in excess of $100B. That would have translated to direct impact on big and small businesses. It would impact even the shops, hair salons, restaurants and taxi services.”
Ramson said that, “in capturing 10 percent, even if it creates minor inefficiencies or project losses, at least we know there is a direct impact in the local economy where our people, the masses, are benefitting.”
The Lawyer said that unfortunately, it does not seem as if the government will act right any time soon.

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