Private sector must temper expectations for greater local content demands

Nov 20, 2022 News

– Country does not have capacity to keep up – Min. Bharrat warns

Kaieteur News – As the country gets ready for its first review of the Local Content Legislation, Natural Resources Minister, Vickram Bharrat, has cautioned stakeholders in the private sector to temper their expectations for greater local content demands.

Natural Resources Minister, Vickram Bharrat

“We have to be honest with ourselves and accept our disadvantages and shortcomings and recognize what we need to strengthen. There is a capacity deficit in Guyana and we cannot run away from that. And no one is to be blamed for that because we are moving at such a speed that it is hard to keep up,” the Minister said.

During a recent engagement held by the Private Sector Commission (PSC) last week, Bharrat said the law currently sets aside 40 areas of work which must see high levels of participation from Guyanese. Some of these works pertain to logistics, security, immigration support, transportation, customs brokerage and catering.

Bharrat said the private sector must be mindful not to seek demands to have a large number of services added to the law since the country is experiencing a capacity deficit. He appealed that their recommendations be realistic.

Bharrat said, “In order to truly achieve local content, I would remind the private sector that it can only be achieved with capacity development. We can quarrel whole day about what aspects of the ring-fenced categories of work must be increased but do we have the capacity to meet the targets effectively, efficiently and cost effectively?”

While the minister is on one hand cautioning the private sector to temper its demands for the upcoming legislative review, government on the other hand is also supporting and fuelling an unprecedented speed in development.

Since assuming office, it has not only supported ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL) with increased production and the Liza Destiny and Liza Unity vessels but it has also signed off on two more licences for projects in the Stabroek Block, namely Yellowtail and Payara.

Government is also supportive of Exxon and partners developing a fifth project. In its project summary that was submitted to the Environmental Protection Agency (EPA), Esso Exploration and Production Guyana Limited said the Uaru Project will be located in the eastern portion of the block, approximately 200 km from Georgetown and amid previous Stabroek Projects.

Current plans include drilling to produce oil from approximately 40-76 wells which costs millions of dollars. Production is expected to begin between the fourth quarter of 2026 and the second quarter of 2027, with an expected field life of at least 20 years.

EEPGL said the production facilities to be installed include subsea equipment attached to the seafloor as well as processing equipment on the ocean’s surface known as a Floating, Production, Storage, and Offloading vessel.

The anticipated production rate for the FPSO ranges between approximately 220,000 barrels and 275,000 barrels of oil per day. The vessel will be capable of storing approximately two million barrels of oil.

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