Govt to reclaim benefits lost from deficient agreements

Local content

— to establish robust local content framework – VP Jagdeo

With the Payara licence issued after a vigorous review of Exxon’s Field Development Plan (FDP), Vice President Bharrat Jagdeo has said that ensuring Guyana establishes a robust local content framework is the next priority for the Government.

The People’s Progressive Party (PPP) Government only took power in August. And by September, it was able to get Exxon to sign a substantially improved Payara permit, compared to the permits the former Government produced for Liza Phase 1 and 2 developments. At a recent press conference, he said the focus must now shift to areas like local content.
“We have managed the first act of the Government, to get a licence that looks like a normal licence. Very different from the one before. We have an environmental permit that looks like a normal environmental permit, not like the one before,” he said.
“Having completed this, how do we get more out of what was signed and out of the industry? And that is why we have started work already on the local content policy. So, we put the commitment in the licence, that they have to commit to the policy,” Jagdeo added.
According to Jagdeo, the next stage of their engagements with oil companies, particularly Exxon, will see the Government focusing on local content and the gas to energy project. Exxon is the only company in Guyana to have started producing oil, in the Liza field. Jagdeo was of the view that a robust local content framework will help to reclaim benefits that Guyana lost from the deficient agreements the former Government entered into.
“We hope those will bring significant benefits, clawing back some of the losses on the fiscal side that we had in the production agreement… we’re developing a Local Content Policy that will see this and all oil companies spend more on Guyanese business and Guyanese people being employed, at fair pay,” Jagdeo said.
According to him, this is important “so that hundreds of millions of dollars in business, that are being funnelled out of the country, that don’t help our people, that they remain here. That is a crucial part of ensuring we get more and that is the next frontier. We’ve completed this one, we work in stages. So, we’re going to move now.”

Panel
A testament to the seriousness with which the Government views local content is the fact that soon after entering office, it established a Local Content Panel that comprises of renowned Trinidadian Local content expert, Dr Anthony Paul.
Paul, who is the Principal Consultant, Energy and Strategy, Association of Caribbean Energy Specialists Limited, has played a critical role in the formulation of local content policies in Ghana. He has also been vocal about local content issues in Guyana.
Former Foreign Affairs Minister under the previous A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, Carl Greenidge, is also on the panel. Greenidge, an economist by profession, also served as Finance Minister from 1983 to 1992.
Besides Paul and Greenidge, the panel also includes former Trinidadian Energy Minister Kevin Ramnarine. Ramnarine is no stranger to these shores, having given speeches and been vocal on energy-related issues affecting Guyana.
Ramnarine served as the Minister of Energy of Trinidad and Tobago (2011 to 2015). During his tenure, he created a positive climate for investment, including the fiscal reforms, which resulted in major investments in deep-water exploration. Prior to being appointed Energy Minister, he held positions in the Energy Chamber of Trinidad and Tobago and at British Gas where he worked as the Lead Economist.
Ramnarine holds a Bachelor’s of Science in Chemistry, a Master’s of Science in Petroleum Engineering and a Master’s Degree in Business (MBA). Since leaving ministerial office, he has worked as an energy consultant and as a lecturer at the Arthur Lok Jack Global School of Business. In 2014, he was named “Energy Executive of the Year” by the Petroleum Economist magazine.
Guyana Manufacturing and Services Association (GMSA) Head and former presidential advisor Shyam Nokta will be the Chairman of the panel. Nokta also previously served as Head of the Office of Climate Change where he coordinated Guyana’s response to climate change, the development and implementation of the Low Carbon Development Strategy (LCDS) and REDD+ Partnership with the Kingdom of Norway.
The panel also includes Finance Professor Floyd Haynes and trade unionist Carvil Duncan. Haynes is an adjunct Professor in Finance and Accounting at the University of the District of Columbia and a Public Lecturer in Leadership and Management. He is also the founder and President of Haynes Incorporated, a Washington-based international accounting and management consulting firm, and a member of the Association of Certified Fraud Examiners.