Final document must ensure oil increases value of other industries

Feb 19, 2021 News

Understanding the Draft Local Content Policy (Pt 2)…

Kaieteur News – Today, Kaieteur News continues with Part 2 of its initiative, which seeks to provide the public with a simplified understanding of the draft local content policy that is currently undergoing a month-long consultation process led by the government.
As a brief recap, yesterday this newspaper explained that the policy proposes that local content be considered the sum of inputs of local goods and services, including employment, provided to oil and gas operations. This occurs when operators hire locals as employees or contractors or buy goods or services from them.
It therefore means that in the final document, Guyana should aim to: maximize the level, quality, and benefits of participation in the petroleum sector value chain by Guyanese.
Equally important is the aim of ensuring the policy seeks to ensure value extends beyond the oil sector. In this regard, one needs to examine, as a whole, the forward, lateral, and backward linkages that are possible.
According to the draft document, backward linkages are those created by the commercial relations between oil operators and their supply chains, which include the transfer of technology and know-how, employment of nationals, and sourcing local goods and services.
Lateral linkages utilize the demand of the sector to develop skills, services and infrastructure that can positively impact on other sectors of the economy while allowing locals to participate in the petroleum supply chain. An example of this would be investing in training Guyanese that can serve a dual purpose, that is to say, for agriculture and oil and gas for example.
Forward linkages involve the construction of facilities that process and export these resources, such as refineries and petrochemical facilities.
It therefore means that Guyana’s local content policy must have provisions, which support maximum participation of its people in various aspects of the oil sector as well as ensure that other sectors like the agricultural industry are given adequate support. This is to ensure the country’s prosperity beyond oil.

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