Local Content provisions for Payara licence flout petroleum laws

Local Content provisions for Payara licence flout petroleum laws – Chris Ram

Oct 11, 2020 News

– PPP/C Govt. has done exactly what Trotman did with Liza Phase One

Kaieteur News – Upon doing a preliminary review of the production licence, the People’s Progressive Party/Civic (PPP/C) approved for ExxonMobil’s third development project, called Payara, chartered accountant, Christopher Ram said it is clear that the administration has failed the nation.

Attorney-at-Law, Chris Ram

In a brief comment to this newspaper, Ram – who holds a Masters of Laws in Oil and Gas – said his conclusion in this regard is based on what is contained in that the section of the licence called “Local Content and Participation.” That aspect of the licence states that not less than 60 days prior to the beginning of each year, the Licensee, ExxonMobil, shall submit to the Minister a yearly Local Content Plan which shall detail the company’s objectives, utilization levels, activities, and programmes aimed at compliance with its obligations under the Petroleum Agreement, applicable law, and government policy.

Former Minister, Raphael Trotman.

Current Minister, Vickram Bharrat.

Ram was keen to note however that this is against the nation’s Petroleum Exploration and Production Law of 1986. At Section 36 of the Act, it clearly states that “A petroleum production licence shall not be granted to an applicant therefore unless – the applicant’s proposals for the employment and training of citizens of Guyana are satisfactory; (v) the applicant’s proposals with respect to the procurement of goods and services obtainable within Guyana are satisfactory.”
Taking the foregoing into consideration, the attorney said that the law therefore requires that ExxonMobil’s local content plans should have been reviewed and deemed satisfactory before the production licence for Payara was awarded. He opined that to do otherwise would be against the grain of the law while adding that he had been heavily critical of former Natural Resources Minister, Raphael Trotman, for making the same grave mistake when he had approved the production licence for the Liza Phase One Project. The current Minister of Natural Resources is Vickram Bharrat.
In conclusion, the attorney-at-law said, “After all the talk and talking, the so-called condition, ‘Local Content and Participation’ is patently inconsistent with the Petroleum Exploration and Production Act. This can neither be explained nor excused and for me, this is a major, major disappointment.”

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