Jagdeo vows to fast track oil sector for 15 years minimum, has no shame about that

Apr 05, 2023 News

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By Kiana Wilburg

Kaieteur News – The PPP/C Government plans to embark on a number of measures that will keep the oil industry on the fast track for a minimum of 15 years, says Vice President,  Bharrat Jagdeo.

The official said such an approach would include the timely award of production licences as well as encouraging investment in the sector. Given the pace at which discoveries are being made in the Stabroek Block, and the overall speed of development activities, Jagdeo said it is critical that the government adopts a complementary approach to ensure local and foreign businesses are not left with stranded investments.

He provided this policy position during the country’s first Local Content Summit held yesterday at Pegasus Corporate Suites and Convention Centre under the theme, “Sustaining Supplier Development through Local Content Partnerships.” The event was hosted by MBW Support Services, a women-powered company that is led by Abbigale Loncke-Watson.

The summit brought together policy makers, industry operators and contractors, vendors/suppliers, investors and general businesses in one forum to better understand the role of local content as a driver of the economic growth.

Jagdeo was the keynote speaker and thanked the purpose-driven Guyanese entrepreneur for taking the initiative to host the event. Though, noting that the government is not a “big fan” of summits, he did acknowledge the importance of such platforms for generating deeper conversations about local content which speaks to giving first consideration for the use of Guyanese goods and services.

The Vice President also said that government officials were present at the event to listen and not necessarily divulge details about what plans are being streamlined to channel greater benefits in the oil sector to locals.

Speaking to the mindset that led to the creation of the soon-to-be-amended Local Content Legislation, Jagdeo said it was the administration’s intention to not engage in wholesale copying of best practices from other nations. “The law was not one you could take best practices from elsewhere and transpose them here in a major way into the Local Content Legislation…we had to go through an iterated process to craft a piece of legislation that is appropriate for Guyana and the stage of development for goods, services and capacities here without harming interests of first tier oil companies/contractors and without slowing the momentum,” expressed the Vice President.

He said it was a careful balancing act that will have to be pursued once again with the update of the law this year. The policymaker for Guyana’s oil sector also noted that if the administration is to stay true to its objective to build capacity and grow the economy in the future years, it must take decisive steps.

“We want to be able to amortise the major investments that they (companies) are making now as a consequence of the Local Content Act; for example, many of them are putting up buildings to rent and they need to have enough business for about 15 years to recoup costs. So keeping that in mind, it mandates the government to operate in a certain manner,” the official said.

He said too that the government cannot operate in a manner that would see international and local investors being left with stranded investments.

The Vice President said, “All that we are doing is to sustain the level/(momentum) and we will do so aggressively and unashamedly to sustain high levels of activity for a minimum of 15 years. That means licencing new FPSOs (Floating, Production, Storage and Offloading vessels), consistently encouraging investment, going out, as we have done, to an auction in a manner that could potentially have a minimum of five different investors in the basin.”

Jagdeo was also keen to note that government is not unmindful of the debate taking place globally about the need to reduce carbon emissions to save the planet. He said the administration subscribes to that philosophy. He stressed however that the transition from fossil fuels to renewables has to be just and in a sustainable manner. He said, unreservedly, that the government will not succumb to the jaundiced calls of certain detractors to shut down the industry. In closing, he said government will continue to defend the country’s right to develop its resources. The official also called for there to be a deepening of the analytical views that make their way into the media.

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• Abbigale Loncke-Watson, Bharrat Jagdeo, floating, production, Stabroek Block, Storage and Offloading vessels, Vice President

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