Latest update November 26th, 2024 1:00 AM
Local Content Goals could be compromised if field development goes too fast – Expert warns
By Kiana Wilburg
Kaieteur News – Since it is the Government’s intent to not renegotiate the 2016 Stabroek Block Production Sharing Agreement (PSA), and instead, seek to claw back value through mechanisms like the Local Content Legislation, industry stakeholders therefore suggest that care be taken in how fast offshore field development takes place.
T&T Energy Strategist, Anthony Paul
Essentially, going too fast could undermine the goals of the legislation. This advice was recently offered by Trinidadian Energy Strategist, Dr. Anthony Paul during his appearance on Kaieteur Radio’s Programme, ‘Guyana’s Oil and You’.
Paul said, “It is no doubt that this is a very exciting time for Guyana. The potential is huge and Guyana I am sure will do well with oil and gas but the question I ask is: “How can you do better you? A few things keep me thinking about where the answers to this are. The question of natural gas comes up in this regard. Who’s thinking of the big picture for natural gas? Who’s looking at the whole resource potential of it? Who’s looking at the downstream potential and building skills and partnerships that keep locals in the driver’s seat?”
The next matter for consideration he said is the pace of development. Paul reasoned that if it is the country’s intention to achieve its local content goals, build capacity and maximize value, then a fast paced development undermines this.
According to Guyana’s Local Content Law, there are a set of specific goals to ensure citizens are in the driver’s seat of the industry. These include prioritizing Guyanese nationals and Guyanese companies in the procurement of goods and services for the enhancement of the value chain of the petroleum sector, enabling local capacity development, and providing for the investigation, supervision, co-ordination, monitoring and evaluation of, and participation in, local content in Guyana.
Paul said, “If local content is important then faster isn’t better because you can’t build capacity fast enough to get the value out of it if you are spending and producing quickly too. So that’s a consideration for the country.”
Another key factor he noted is the importance of building capacity to manage oil spending effectively. He said this was a major failing of Trinidad and Tobago. He said, “Any money that came in quickly, was very inefficiently used and sometimes stolen so I would say that Guyana should make sure that it builds the capacity to manage expenditure well and you put the right amount in savings and long-term investments.”
Paul added, “The financial management of that quick revenue is something that I haven’t seen a lot of conversation around because you also don’t want a society where the poor get poorer and the rich get filthy wealthy. That can have an impact on things like crime, quality of life etc.” Ultimately, the Energy Strategist said he is of the view that Guyana can and will do well with its oil sector so long as it keeps its eyes on the right issues and citizens continue to be vigilant.
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