Govt approves Local Content Plans for Exxon, 4 other oil companies

– LCS processing more compliance certificates

The Ministry of Natural Resources has approved the annual Local Content Plans of five major oil companies, including from oil giant ExxonMobil, all of whom have also been awarded their Certificates of Compliance from the Local Content Secretariat.

According to the Local Content Act, contractors, sub-contractors and licensees operating in Guyana’s oil and gas sector, are required to submit annual Local Content Plans that detail how they intend to comply with the Act and create opportunities for locals.
Accordingly, ExxonMobil Guyana (represented by President Alistair Routledge), Technip FMC (represented by Nicolas Siccard), Halliburton Guyana (represented by Vahman Jurai), Baker Hughes Guyana (represented by Jon Charles Rhodes) and Saipem Guyana (represented by Gianluigi Della Rosa), recently received their Certificates of Compliance
Minister of Natural Resources Vickram Bharrat, who was present at a simple ceremony to hand over the certificates, noted that these plans are a testament to the Government’s goal of ensuring that foreign companies invest heavily in the development of local content.
He pointed out that Guyanese suppliers are given a fair opportunity to not only tap directly into Guyana’s petroleum sector but to also build, strengthen and expand their business capacity and services.
“We are pleased to see the commitment of these companies to local content, and we look forward to working with them to ensure that the goals of the Local Content Act are achieved. This is a crucial step towards building a sustainable oil and gas industry that benefits all Guyanese,” the Minister said.
Meanwhile, Halliburton’s Jurai commented that the company is proud of its commitment to local talent and vendor development in Guyana and lauded the experience of working with the secretariat. Technip FMC’s Siccard echoed similar sentiments.
“Growing local content is not an obligation, this is how we do things from a TechnipFMC standpoint. Since the commencement of our activities in Guyana in 2017, we have indeed endeavoured to gradually develop our local content: through developing a Guyanese workforce.”
“Through growing a pool of passionate local subcontractors, and through investing into TechnipFMC’s very own support asset in Guyana – our world-class service base. The combination of those three pillars enabled the complete repatriation of our activities in the country at the end of 2021, and has been the foundation on which we built our successes today,” he further said.
The Local Content Certificates confirm that the respective companies have delivered on commitments and targets set out in their annual plans. Since the establishment of the local content legislation, this will be the first occasion on which these Certificates of Compliance have been issued.
“The secretariat is currently in the process of awarding certificates to other companies, as it makes good on its legislative commitment of ensuring that the spirit of local content in Guyana is upheld,” the statement from the Ministry further said.
After being passed in the National Assembly in December 2021, the Local Content Laws were enacted in January 2022. The Act lays out 40 different services that oil and gas companies and their subcontractors must procure from Guyanese companies.
These include 90 per cent of office space rental and accommodation services; 90 per cent of janitorial services, laundry and catering services; 95 per cent pest control services; 100 per cent local insurance services; 75 per cent local supply of food; and 90 per cent local accounting services.
The Local Content Act mandates penalties, such as fines ranging from $5 million to $50 million, for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act.
However, the Act is intended to be a living one and both President Dr Irfaan Ali and Vice President Bharrat Jagdeo have noted that the legislation will be continuously reviewed and updated over time in order to close loopholes that are being exploited by operators in the oil and gas sector.
In fact, Attorney General and Legal Affairs Minister Anil Nandlall, SC, recently indicated that the consultation process to update the local content legislation will commence soon.