Latest update November 21st, 2024 1:00 AM
Draft Local Content Law proposes Guyanese participation in 152 oil sector services
By Kiana Wilburg
Kaieteur News – The Government’s Draft Local Content Legislation is proposing to have Guyanese participate in 152 oil sector services so as to ensure maximum participation across the industry. In the document perused by Kaieteur News, it was noted that oil companies as well as their subcontractors are expected to comply with the sliding scale targets for the respective sectors.
Under Petroleum Agreements, the government is proposing that oil companies in the upstream sector ensure 10 percent of their management staff is Guyanese at start up with an increase of 20 percent in three years, followed by 25 percent in five years and 45 percent in 10 years.
For supervisory staff, oil companies in the upstream industry are being asked to have 15 percent of their staff be Guyanese and have this increase to 65 percent in 10 year. All unskilled workers are proposed to be 100 percent from start up to a period of 10 years.
For oil companies in the Midstream and Downstream industries, they are expected to have management staff of locals accounting for 20 percent at start up and climbing to 50 percent in 10 years. Here again, all unskilled workers for Midstream and Downstream services are expected to be 100 percent Guyanese.
With respect to Front End Engineering and Design (FEED) services at onshore facilities, the draft legislation proposes to have Guyanese supply 20 percent of these services for companies starting up with this level being increased to 90 percent in 10 years.
For FEED at Liquefied Natural Gas facilities, the document proposes locals supply 10 percent of the services at start up and increase to 90 percent in 10 years. As for FEED related to hull and topside modules, it is being proposed that locals supply 10 percent of the services at start up and ramp up to providing 95 percent of same in 10 years.
Some of the sliding scale local content levels being proposed in the draft Local Content Law.
With respect to the provision of materials such as steel plates, flat sheers, steel pipes, and low and high voltage cables for the oil sector the government wants Guyanese providing 100 percent of these to the oil sector in 10 years.
In the area of well drilling services, the draft legislation notes that in 10 years time, Guyanese should be providing 90 to 95 percent of reservoir services, well completion services, production or drilling services, 3D seismic data acquisition, well overhauling or stimulation services, well head services, well crisis management services,
With respect to health, safety and environmental services, the draft legislation is proposing to have 95 percent to 100 percent of the security, firefighting, electrical, equipment brokerage, vessel tank cleaning, catering, laundry, offshore medical and support, and industrial cleaning services be provided by Guyanese in 10 years.
Other carve outs for locals include legislative drafting and legal consultancies being done 100 percent by Guyanese from now to the next 10 years and tax preparation, payroll support, accounting support being provided 100 percent from the time of start up to the next 10 years.
Interestingly, within a six month period, the government wants the following services to be done 100 percent by Guyanese: transportation of goods and services, shipping and logistics services, accommodation services, conferencing facilities, rental of buildings and equipment, surveyors, environmental studies for development projects of each field such as for the FPSO and gas development project, environmental services, pipe weight coating, pipeline installation excluding welding and Non-Destructive Testing services, civil works, structural fabrication, waste management, warehousing facilities, construction services, cleaning services, and catering services.
It should be noted that the draft legislation is still receiving feedback from the business community and the final version will be made public soon.
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