Energy Director claims draft to be circulated in 2 weeks
Oil and gas Local Content Policy
…Compliance Unit being contemplated
In light of recent comments by People’s Progressive Party/Civic (PPP/C) Presidential Candidate Irfaan Ali decrying Government’s failure to prioritise the implementation of a Local Content Policy (LCP), Energy Director Mark Bynoe has stated that the first draft of the Policy was completed.
Bynoe added that Government was also working towards establishing a Compliance Unit to monitor data from the sector and ensure that the oil resources are managed prudently.
At a recent press conference on Wednesday, Bynoe further stated that progress has been made to secure Guyana’s resources once the oil industry comes into play. The Unit will ensure that issues of Guyanese are addressed.
“The Department is currently setting up a Local Content Compliance Unit. [That Unit will] not only validate the information that is being provided, but also to receive any potential issues or concerns Guyanese contractors or suppliers may have,” Bynoe stated.
He stated that while there has been improvement in reports provided by oil companies, there is still more information to be delivered, especially specific data to determine where these resources are streamed into and the benefactors.
“In terms of the granularity of the reports that are provided, yes we have seen an improvement, but this was a dynamic process. There is still other granular information that we’ve asked the operator to provide for us, that we’re better able to analyse who is getting what, what is going where, which regions are benefitting more than others and so that even as we seek to build capacity, we can have a more targeted and strategic approach”.
On the other hand, Finance Minister Winston Jordan, at a press conference, had stated that while legislation is important, the Government should not make it “the be-all and end-all”.
He added that many companies that are coming are not waiting for Local Content and other legislation.
In highlighting Jordan’s remarks, Ali said it is unfortunate that such a statement is coming from the Minister as Guyana edges closer to ‘first oil’— as a country that is extremely vulnerable because of the weak legal and regulatory framework.
He pointed out that around the world, a LCP is considered a necessary condition when countries are looking to become oil producers so that they can benefit as much as possible from the industry.
“It would take less than one year with the help of international organisations to develop such a policy at a cost that we can afford as a nation. The literature on LCP is very explicit on why it is essential for every country involved in the production of oil and gas that is technical and capital intensive,” Ali was quoted as saying.
Ali explained that in the absence of direct opportunities from the sector, the Policy allows for countries to create value-added economic activities related to the oil industry. Another important aspect of the LCP is the creation of employment opportunities when investments and entrepreneurial activities are facilitated.
Presently, the Energy Director has positioned that the final draft has been completed. It will be provided to the private sector and other pertinent bodies.
“The Local Content Policy final draft is completed and is to be presented in approximately two weeks to the private sector and other relevant stakeholders,” Bynoe indicated.
ExxonMobil affiliate, Esso Exploration and Production Guyana Limited, is operator of, and holds 45 per cent interest in the Stabroek Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited – a wholly-owned subsidiary of CNOOC Limited— holds 25 per cent interest.
Meanwhile, more drilling is scheduled for this year and the first Floating Production, Storage and Offloading (FPSO) vessel bound for Guyana— the Liza Destiny— was commissioned.