Latest update November 15th, 2024 1:00 AM
“Make sure Local Content Law is not only written, but enforced” – Chairman of Nestoil Group urges Govt. to avoid Nigeria’s mistakes
Dr. Ernest Azudialu-Obiejesi, Chairman of Nestoil Group, a Nigerian firm
Kaieteur News – Dr. Ernest Azudialu-Obiejesi, Chairman of Nestoil Group, a Nigerian firm, has underscored the critical importance of not only enacting a Local Content Law but also enforcing it to ensure the effective compliance.
During a recent interview on Energy Perspectives, an energy podcast, Dr. Azudialu-Obiejesi was asked about Nigeria’s long history with oil and gas, highlighting both successes and missteps.
When asked what advice he would give to the people of Guyana on how to best utilize their resources; he first acknowledged the complexity of the question before he addressed the Guyanese government, urging them to learn from Nigeria’s experiences.
“I’d like to say that the Guyanese government is very, very well positioned to ensure that they succeed because they can learn from mistakes of countries like Nigeria, and can also learn from countries like Norway and some other countries that had oil and use them very well,” he noted.
He continued to reflect on Nigeria’s journey, noting that while the country made significant strides, there were also notable errors. One key takeaway he highlighted for Guyana was the necessity of enforcing local content laws.
In 2021, Guyana enacted its Local Content Law. The law serves to provide for the implementation of obligations on persons engaged in petroleum operations or related activities in the petroleum sector; prioritizes Guyanese nationals and Guyanese companies in the procurement of goods and services and enables local capacity development. In fact, the First Schedule of the Act ring-fences 40 categories of work for Guyanese participation via the supply of goods and the provision of services which include: food supply, rental of office space, accommodation, insurance, accounting and legal services.
Since enactment there have been several issues which have resulted in the government promising amendments to the legislation.
“But one thing that is very important, I will say…that the Guyanese government has to pay particular attention to is making sure that the local content law is not only written, but it’s enforced,” Dr. Azudialu-Obiejesi stated.
He continued, “Because if you write it just like we did in Nigeria, and you don’t enforce it, there will at the end of the day, the investments or the billions that are passed through Guyana for you know, from the oil and gas industry will not improve or touch the lives of the people.”
He pointed out that Nigeria implemented its local content law after many years of oil production, resulting in missed opportunities to maximize benefits for the local population.
Dr. Azudialu-Obiejesi concluded by highlighting the benefits of strict enforcement, which would lead to significant technological and service advancements within the country. He also recommended updating the laws as the sector continues to grow.
He said, “So they need to review that law, improve, improve on the law all the time, and making sure that you know, the enforcement of that law and the enhancement of that law is something that they review periodically to make sure that all of the conditions within the laws are met practically on ground.”
Moreover, Vice President Bharrat Jagdeo has issued a stern warning against the exploitation of Guyana’s Local Content Act through deceptive practices like ‘rent-a-citizen’ schemes. And he warned Guyanese involved in the business to desist or else they will face the full force of the law.
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