Local Content Policy must target investment outside Petroleum Sector – Vincent Adams … in line with GSDS Vision 2040

Local Content Policy must target investment outside Petroleum Sector – Vincent Adams … in line with GSDS Vision 2040 – Dean of SEBI

Aug 26, 2019 News

Dean of SEBI, Dr. Leyland Lucas

EPA Head, Dr. Vincent Adams

Because oil will not last forever, Guyana’s local content plan must target investment outside of this potentially lucrative sector.
That was insistence of Energy expert and Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams.
He made this point during a Roundtable Discussion on the third Draft Local Content Policy, held by the Georgetown Chamber of Commerce and Industry (GCCI) at The Duke Lodge, on August 21, 2019.
Adams cautioned that it is likely that Guyana’s oil will only last for about 25 years, “because these companies are going to pump the hell out of the reservoir, as fast as possible.”
There has been a lot of discourse about how the oil sector will inform Guyana’s development long after it is finished. Guyana passed the Natural Resource Fund Act earlier this year, to detail how Guyana will manage its intended Norway-style Sovereign Wealth Fund.
Adams believes that the local content, legislation or agreement policy should be focused on “what is best for the country, not just what is best for the Petroleum sector… Whatever is in that local content policy, agreement or legislation should be targeted to investment outside of the Petroleum industry.”
Professor of Business and Dean of the University of Guyana’s School of Entrepreneurship and Business Innovation, Dr. Leyland Lucas, also presented at the forum, and lent credence to the suggestion of Dr. Adams.
He explained how the local content policy could be utilised to enrich Guyana’s development on a national scale.
He gave the analogy of someone in a desert and who hasn’t had anything to eat or drink for a long time. That person, he said, would die if they suddenly ate and drank as much as they could very quickly.
He used this example to support his contention that a system must be created that allows Guyana’s use of its wealth for development to be phased.
“Over 30-plus years, we failed to develop a human capital development strategy.” Professor Lucas said, lamenting that Guyana has been exporting its most important resource, human capital, for decades.
“Because we’ve been exporting human capital… the definition of local content should not ignore the diaspora. Not only in terms of bringing those competencies and capabilities back, but also in terms of how we define a local business.”
He said that it is important to consider local content in the context of Guyana’s National Development Strategy, the Green State Development Strategy: Vision 2040.
“Local content should therefore be geared toward providing us with the competencies and capabilities that can feed into that national development strategy.”
He said that oil and gas prices are bound to vary.
“Where do we go as a nation when oil prices are low and producers have decided that it’s not in their best interests to continue pumping at a certain level? The nation has to survive. Development has to continue. And that development has to be built around the Green State Development Strategy.”
The GSDS: Vision 2040 was launched earlier this year. It is a step-up to the previous Green State Strategy, and now considers development with consideration for the oil and gas sector.
It is an economic plan that the government intends to use to guide the development of Guyana for the next 20 years. The model assumes a required investment of $1.05 trillion between 2018 and 2040.