Training for local content in oil industry

Sep 05, 2020 Letters

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DEAR EDITOR,

Every country that explores and extracts oil has a local content policy – meaning the foreign companies must use a portion of inputs in extraction from local resources. It is enforced everywhere where practical. Guyana has such a clause in the Exxon contract pertaining to the extraction of oil and gas and development of the industry. This part of the contract is not being satisfactorily enforced. The country gets miniscule amount, just the skin or the salt from the peanuts while others eat the nuts.
Guyana’s economy benefits in a miniscule way from local content. Foreigners are the beneficiaries of local content. They link up with Guyanese companies that get fine change in the process. Those of us who study economics would know that very little redound to the country especially to the lower sections of the society. This needs to immediately change.
President Ali’s appointment of a local content advisory panel to set policy on use and enforcement of local content is welcome. The development of the budding oil and gas industry needs a heavy dose of local content.
Exxon claims it spent billions in the industry since 2015 but hardly a few millions went to Guyanese, except Muneshwer that handles ground logistics in cooperation with a Trinidad company. (We don’t know its receipt from Exxon). Local content was minimal. There are virtually no Guyanese workers on the rig. The bulk of the population or companies are out from those multibillion dollar expenditures. (I could not contact Exxon office in Guyana during several attempts to query about policies on local content and generally on employment practices. I went three times to two of its office buildings prior to March in Georgetown and could not access anyone. I left messages and written notes that were not answered. I phoned the Houston headquarter and spoke with someone who promised to have the point person for Guyana contact me on my American phone number. It never happened. Emails went unanswered. That is the kind of courtesy and respect accorded Guyanese by Exxon’s executives and PR point person).
This year, some US$175 million in revenues is expected. Much more will come in 2021. And from 2022, it is expected to be in the billions. Guyana must prepare itself to establish oil and gas related industries to maximize benefits. For now, it must start with an effective enforceable local content policy and prepare the nation for local content involvement.
In every country, government demands that oil companies use a minimum percentage of local content – staff, expertise, materials, management, logistics, etc. But Guyana has limited local content related to the oil industry; it lacks skilled personnel and does not produce goods used in the oil industry. It is also deficient in ground logistics for off shore extraction of oil. Therefore, the country must prepare itself for local content by training skilled workers in the area and in establishing industries that would supply the oil companies. The objective is to create jobs, and train locals for the jobs that require technical skills. Countries strategically direct local content to transfer technology into the country to accelerate industrial development. Guyana has no local skilled individuals in O&G. So we must train them.
In the Guyana context, local content has to do with the development of local skills, local technology transfer, and use of local personnel as well as local manufacturing for use in the oil and gas sector – for industrialization. Local content is building a workforce to take over the management of the oil industry eventually towards complete ownership
The preceding government let the nation down in its handling of the oil and gas industry by not having stringent requirements and inclusion. Local content should have been specified as skills and management related.
Guyana must look ahead with a development plan that must include training and skills related. Rural and hinterland workers who were rendered jobless by the preceding regime should immediately be trained to obtain jobs in the oil industry.
I think government should give consideration to transforming the Port Mourant Training Center (PMTC) into a partial oil and gas institute to train workers for the oil industry. That PMTC provided skills to so many who went on to become first rate engineers in the UK, Canada, USA, and Trinidad and elsewhere earning triple digits US dollars salary. It can do the same for O&G. The center can be twinned for oil and gas for the sugar factories.
We need an oil and gas institute separate and independent from UG. PMTC is ideal. While spending time in India during the last several years assisting with management at tertiary institutes, I interacted with oil specialists. Some are willing to assist with training Guyanese and in establishing such an institute. Such an institute can train people for local content participation – on land logistical management, administration, EPA, health and safety, how to clean up oil spills, handle emergency, transportation logistics, food chain supply, and the technical aspects of drilling, piping, supplies, etc.

Yours truly,
Dr. Vishnu Bisram

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