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Oil companies agree to pay local suppliers within 45 days
Kaieteur News – The Ministry of Natural Resources on Wednesday approved the Local Content Master Plans of tier-one contractors, SBM Offshore and Halliburton, among others which are operating in Guyana’s oil and gas sector.
Minister of Natural Resources, Hon. Vickram Bharrat hands over an approved Local Content Master Plan to the Country Lead of Halliburton Guyana, Mr Vahman Jurai
(L-R)Legal Officer of the Ministry of Natural Resources, Mr Michael Monroe, Director of the Local Content Secretariat, Mr Martin Pertab, Minister of Natural Resources, Hon. Vickram Bharrat with the General Manager of SBM Offshore Guyana, Mr Martin Cheong
The signing, which took place in the boardroom of the Ministry of Natural Resources’ head office in Kingston, Georgetown, comes on the heels of a newly proposed modification by the Local Content Secretariat. This amendment, which is included in the five year local content plan and is enforceable by law, will now see contractors and sub-contractors operating in the nation’s petroleum sector issuing payments to Guyanese suppliers within 30 to 45 days following the receipt of a correct invoice.
At the signing, Minister of Natural Resources, Vickram Bharrat underscored the importance of contractors and sub-contractors implementing this amendment. He reminded that the move promotes local suppliers’ competitive financing and growth through appropriate contract and payment terms, and is in keeping with Guyana’s Local Content Act.
Also sharing comments on the signing, the General Manager of SBM Offshore Martin Cheong expressed the company’s excitement about the approval of its Master Plan. He said, “We have been hiring an increasing number of Guyanese, engaging more local suppliers for the provision of goods and services, and expanding our training and capacity building programmes as our operations increase in the country.”
Meanwhile, Halliburton’s Country Lead, Mr Vahman Jurai said with the approval of the company’s five-year local content plan, it is cognizant of one of Halliburton’s guiding principles of ‘Global Citizenship’.
Mr Jurai related, “Halliburton is eager to work closely with our local vendors, sharing our knowledge when needed. We hope to significantly contribute to the development of Guyana’s talent in the oil and gas sector, whether through the university programmes we support or through hands-on experience working with us.”
Kaieteur News understands that the identified contractors, sub-contractors, and licensees have demonstrated, through their Master Plan submissions, their commitment to fostering local content in their operations by prioritizing Guyanese nationals for employment, having policies aimed at non-discrimination and equal treatment of Guyanese nationals, implementing training and other programmes to build the capacity of both their employees and the larger Guyanese workforce, and coordinating with industrial and technical education training institutions in Guyana to provide sponsorships and/or internship opportunities.
The Ministry of Natural Resources through the Local Content Secretariat said it will continue to work with stakeholders to ensure that the goals of the Local Content Act are achieved.
ABOUT THE LAW
The Government of Guyana has solidified its commitment to ensuring that the benefits derived from the foreign direct investments into Guyana’s petroleum sector are captured and retained in-country, through the enactment of the Local Content Act.
The Local Content Act No. 18 of 2021 (‘the Act’) provides for the implementation of local content obligations for companies and persons engaged in petroleum operations or related activities in the petroleum sector and prioritizes Guyanese nationals and Guyanese companies in the procurement of goods and services for the enhancement of the value chain of the sector.
The Act also serves to enable local capacity development and provides for the investigation, supervision, coordination monitoring, and evaluation of, and participation in, local content in Guyana.
The Local Content Secretariat (‘the Secretariat’) is mandated to ensure that the provisions of the Act are implemented and functions as the focal point for the monitoring, evaluation, coordination, and reporting of local content in the petroleum operations of Guyana.
In so far as the Act mandates every Contractor, Sub-Contractor, or Licensee to implement local content as an essential component of their petroleum operations, the Secretariat, through the issuance of industry guidelines, aims to provide detailed and specific guidance to Contractors, Sub-Contractors, or Licensees with regards to their reporting obligations.
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