Two years into oil production, Guyana concludes third attempt at Local Content Policy

Mar 31, 2021 News

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…says findings ‘fixated’ on present domestic capacity to service industry

Kaieteur News – The Ministry of Natural Resources has concluded a third draft Local Content Policy for the country but will be reengaging stakeholders before the completion of a final document—a timeframe within which is still to be announced.
The Ministry made the announcement on Tuesday—some two years since the country started producing oil—and reported “…the general focus of the stakeholders’ response to the draft document fixated primarily on the state of the current capacity of Guyanese businesses and skills.”
This, in addition to the “expectations for better participation and benefits from the sector, the identification of opportunities that exist for Guyanese to participate in the industry and the need for transformation in key related sectors such as education and finance to support business enhancement that will cater for the needs of the growing petroleum economy.”
According to the Ministry, the latest version of Guyana’s Local Content Policy came about through consultations held with some 180 public and private sector agencies and firms.The latest round of consultations in an attempt to finalize a local content policy for Guyana began on March 3, last and concluded on March 25, some 23 days later.

The Ministry in releasing a breakdown of those consulted, identified the oil and gas industry operators, two subcontractors and local suppliers; workforce enhancement such as education agencies, labour unions and regulatory bodies, Tertiary, Professional and Technical & Vocational Education and Training (TVET) providers; manufacturing and fabrication services; and business development and support and financial services from the banking and non-banking sectors.Additionally the Ministry said it consulted with those in the audit and accounting sectors; shipping, warehousing and onshore services; hospitality; housing and infrastructure; and regional and international trade bodies, in addition to other economic sectors.
These include tourism and agriculture; special and vulnerable groups such as women and indigenous people; environmental and civil defence; and legal services.
The Ministry has since encouraged interested stakeholders on the draft Local Content Policy to submit any comments and feedback by today and that “all contributions received are taken under constructive consideration for the preparation of the next phase of the work on the policy.”
Stakeholders will be reengaged on completion of the policy, according to the Ministry’s public missive, in order to ensure that the final document is aligned to “our national objectives of local participation, benefits, enhancing business growth, increased revenue-generating systems and local ownership along the value-chain of the oil and gas sector.”
This local content policy initiative is said to be in response to commitments made by recently elected People’s Progressive Party/Civic (PPP/C) President, Dr. Irfaan Ali, “for Guyanese to play a greater role in the advancement of the petroleum sector, which will allow for more benefits to be received by the people of this country. “
As such—according to the Ministry—“the revised policy document seeks to put into context the current and evolving state of Guyana’s oil and gas sector and to enable an improved level of local business participation through value-addition, access to opportunities and capacity building within the energy sector for Guyanese.”
Guyana’s first attempt at promulgating a Local Content Policy that would eventually direct a legislative framework for enforcement began soon after the 2015 Liza I discovery by a US oil major – ExxonMobil – led consortium in the Stabroek Block some 126 miles offshore Guyana in its Exclusive Economic Zone.
The initiative has seen several rounds of consultations by both administrations, including consultations such as renowned petroleum specialist, Anthony Paul.The Trinidadian had submitted a report that was supported by the local private sector over its proposals but was subsequently scrapped by the then A Partnership for National Unity+Alliance For Change (APNU+AFC) coalition government.
That administration engaged yet another consultant, United Kingdom (UK) resident, Dr. Michael Warner, who led another round of consultations, this time submitting a report to the then Department of Energy, since subsumed into the Ministry as its Petroleum Management Unit.
That report was embroiled in controversy, not only over its author and his relations to the operator ExxonMobil, but the fact that the final document appeared to have removed safeguards for locals and was instead heavily in favour of the oil operators.
That second document was never finalized as a Policy, which led to the Irfaan Ali administration initiating a third round of consultations that have since been completed with the date for a final document to be announced.

 

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