Guyana’s local content laws must evolve as the industry develops

Guyana’s local content laws must evolve as the industry develops – US Analyst

Feb 02, 2021 News

AMI Analyst, Arthur Deakin.

Kaieteur News – Cognisant of the reality that the oil and gas sector is one that is constantly evolving, Guyana’s local content laws must cater for those changes. Making these and other critical points is Arthur Deakin, an analyst at the American Market Intelligence (AMI).
For those readers unaware, AMI, which is a United States management consultant firm, is known for providing its insights which unlock opportunities in Latin America via market intelligence, research and analysis.
Deakin, during his first appearance on the Kaieteur Radio programme Guyana’s Oil & You two weeks ago, was reminded of an article, which he wrote on Guyana’s local content. In that piece, Deakin had warned that Guyana should ensure that whatever rules it is putting in place, so that it does not find itself in a position where it is biting off more than it can chew.
“That’s definitely an important aspect of Guyana’s oil development, this local content rule,” the analyst said, “I think that, you know, what Guyana needs is something, a law that is constantly evolving in the sense that it has certain clauses that adjust according to the sector, the level of development in the sector.”
In pointing to an example of where these evolving laws exist, Deakin referenced our neighbouring Brazil.
To this he articulated, “In some countries, like Brazil, we’ve seen in the past that the original local content rules for its pre-salt oil production had disproportionate fines for non-compliance and even bottlenecks that hurt the construction of FPSOs. So, if you don’t have local content that can’t adjust to the development of the sector, that you know, is sort of stuck in the past.”
He continued, “That’s going to hinder the growth at the appropriate speed of the sector. That’s kind of what I mean by that. You need something that is adequate to the situation, and I think that Guyanese participation is vital for not only the growth of the sector but the growth of the country in conjunction.”
But now, as it stands, Deakin indicated that Guyana does not have the volume to address one Floating Production Storage and Offloading (FPSO) vessel. In light of this foregoing and with more FPSOs to come, Deakin pointed out that what Guyana still needs is proper training for its citizens, as well as more resources invested in educating its citizens regarding the oil sector.

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