Govt continues to undermine local content even with work to audit pre-contract cost

Govt continues to undermine local content even with work to audit pre-contract cost – Ram

Oct 14, 2018 News

Chartered Accountant,
Chris Ram

Chartered Accountant and Attorney at Law, Christopher Ram has said that just when he thought the APNU+AFC government has reached its limit of absurdities; it is proving that is capable of exhibiting more.
His comments were made as he examined recent occurrences in the nation’s oil and gas industry.
Ram said that he entertained genuine hope that Dr. Mark Bynoe, who was appointed Head of the Department of Energy on August 1, would have brought some clarity and sanity to “this Government’s total confusion and ineptitude in its management of the sector.”
However, Ram said that his optimism took a hit when he saw the advertisement that government put out to attract a person or firm to undertake an audit of the pre-contract cost that ExxonMobil submitted to Government. Ram said that he was saddened to view the “conceptually and constructionally flawed advertisement and proposed engagement.”
Ram noted that based on the scope of the work as outlined in the ad, Guyana will be receiving a deficient work. His comments on that can be read here: https://kaieteurnewsonline.com/2018/10/13/audit-advertisement-suggests-that-guyana-will-receive-deficient-work-ram/
Ram noted that government seemed to want to exclude locals based on what is stated in the ad.
Ram said, “Local content has been a major concern for Guyanese and you might think that the Government would become more sensitive to this concern. The advertisement, at best, further undermines such a policy.
“It notes that only firms with a wide geographic spread will be shortlisted, which raises the question whether a single applicant must have a wide geographic spread, i.e. operate internationally, or that, overall, the applicants must be drawn from that wide geographic spread, though whether this means by continent, hemisphere or region is anyone’s guess.
“The advertisement does limit the number of eligible bidders to two from any country! Just when you think that we have exhausted all absurdities!”
Ram’s utterances come even as other businessmen and organizations continue to lament the lack of local content in the oil and gas sector.
Meanwhile, Government remains adamant that there will be no moves now, or in the near future, to make it law that oil companies utilize domestic goods and services.
This is the government’s position despite the fact that it announced, on several occasions, that it is now looking to adopt best practices that are employed by other oil producing countries.
In most oil producing countries around the world, the law dictates that the oil companies must utilize a certain percent of local goods and services.
In fact, Guyana’s neighbour, Brazil, mandates oil companies to use no less than 50 percent local content exploration and production.
Earlier this year, Brazil’s National Petroleum Agency (ANP) approved new local content rules for the country’s oil industry.
Under the revised system, developers were permitted to migrate their contracts as, under previous provisions, 70 percent local content was demanded.
Very recently, the Georgetown Chamber of Commerce and Industry (GCCI) had a meeting with the Minister of Business, Dominic Gaskin and Head of the Department of Energy, Dr. Mark Bynoe.
According to Attorney at Law, Charles Ramson, who is a member of the GCCI, local content was a focal topic discussed at that forum, “Where I was present.”
Ramson told Kaieteur News that instead of advocating for measures to protect local businesses, the government representatives at that meeting were speaking against local content legislation. “Imagine they were offering reasons why we should not have local content legislation. They were arguing against it.”
In addition to the expressions that Ramson said were made at the meeting, Government said, on many occasion, that Local Content legislation is not a priority.
For instance, in the “foreword” of the draft Local Content Policy, Minister of Natural Resources, Raphael Trotman, said, “The Local Content Policy (LCP) will be developed over time and in tandem with the growth of the industry.
“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.”

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