CGX head  says Guyana lacks skill, financing for oil industry

Jul 13, 2023 ExxonMobil, News, Oil & Gas

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…as he woos Ghanaian investors

Kaieteur News – During a roundtable discussion on Wednesday, Executive Chairman for CGX (Guyana) Energy, Professor Suresh Narine, underscored the paucity of skilled workers here in the oil and gas industry and the lack of financing.

The discussion was held virtually. It was hosted by Ghana Petroleum Commission in partnership with the Ghana Chamber of Commerce Guyana (GCCG) and ALA Strategic Consult Ltd, and focused on opportunities for Ghana’s oil & gas service companies in Guyana’s petroleum industry and how they can add value to developing local content in Guyana.

This publication had reported that while Guyana’s oil resources have placed it among the top petroleum producers in the world, the country’s lack of technical expertise and workforce capacity, continues to be a bugbear. The local private sector on multiple occasions had highlighted the constraints of access to capital in country.

In his address, Professor Narine highlighted that CGX, is a Canadian oil and gas exploration company that holds an interest in the Corentyne block in the Guyana Basin – a proven petroleum basin. He said too that since 1997, CGX has been an active explorer both onshore and offshore Guyana and now have two discoveries under their belt.

He said, “We are a very, very fresh country on the petroleum scene.” To this, he added that in many cases Guyana lacks skilled human resources for the oil and gas industry as well as access to capital in country. As such, he encouraged Ghanaian investors who are looking for opportunities in Guyana’s petroleum industry to partner with locals. He noted that he believes that Guyana’s Local Content Law at the current stage cannot realize its full potential without the right partnerships.

He explained that with the enactment of Guyana’s Local Content Law, in order for a foreign company to work in Guyana’s oil and gas industry it must meet certain requirement.

One such requirement is that joint ventures with foreign companies must be 51% Guyanese ownership. “You will find in some cases, very enthusiastic local players who do need help on the skillset side but also require the right kinds of financing that will allow them to own 50% or 51% of your joint ventures. So your entrance in the country is not only your know-how and your cultural attunement, it is also your ability to bring creative financing. And if creative financing can be part of the package, you will find that local content, and joint venture opportunities will abound. So that’s an important aspect of this,” CGX Head pointed out.

“The basic level of local content of course is where you have the supply of fairly unskilled labor, you have the supply of housing, and you have the supply of things like food, beverages, entertainment services, transportation services, logistical services,” he added.

CGX Head explained that the margins of profit that you make increases with the sophistication of the services needed by the operators.

“So I think that this workshop, perhaps is  a good start, but we need a forum where matchmaking between your service providers and our local content interested businesses, can truly engage in intimate discussions about what those opportunities are,” he noted.

Moreover, Senior Petroleum Coordinator, for the Ministry of Natural Resources, Bobby Gossai Jnr., for his part explained that while Guyana’s Local Content Law was only passed in 2021, the move by the Government of Guyana to update the law so soon is to update the local content targets.

He added, “As you heard from Professor Narine, access to capital and financial availability in Guyana is one of our biggest constraints. We encourage investors to come to Guyana, especially those who can bring the necessary capital, hence local content.”

This publication had reported that the International Labour Organisation (ILO) in its December 2022 study emphasised that Guyana’s oil and gas industry is moving too fast for the country’s limited skilled workforce. The ILO findings were highlighted in its report titled, ‘Prospective occupational skills needs in the Guyanese oil and gas industry, 2022-2026’ which was published back on December 19, 2022.

While the Government is persistent in accelerating the industry – the ILO reports states that such a move can end badly for Guyana.

“The accelerated expansion of the oil and gas operations (in Guyana) has exposed a pronounced gap between the industry’s labour demand and the availability of skilled workers at the local level,” ILO said.

To this end, it was stated that if the gap is not addressed, the latter will likely slow down the growth of the sector and of the whole economy or, at the very least, generate inefficiencies in the level performance and for the economy.

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• Executive Chairman for CGX (Guyana) Energy, Ghana Petroleum Commission, industry, Professor, Suresh Narine

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