Guyanese being misled on local content for oil industry – Ram

Outspoken political commentator and chartered accountant, Christopher Ram claims Guyanese are being misled on local content for the oil and gas industry of Guyana.
Ram said it is unfortunate that the comments coming from both people locally and overseas have not been consistent with the laws governing the petroleum sector in Guyana.

“Almost every person that has spoken on local content is speaking either from a position of ignorance or is deliberately misleading people as to what local content means in the context of our Petroleum Exploration and Production Act,” Ram told delegates at GPIEX 2018 on Thursday.
He contended that in order to acquire a prospecting licence, an applicant must state what the local contents are in respect to employment of Guyanese labour. Also, when applying for a production licence, the applicant must state local contents for the purchase of goods and services.
The accountant asserted that until the laws are changed, then those systems will continue to prevail.
Ram also told this newspaper on Thursday that Natural Resources Minister Raphael Trotman and other public officials have all stated repeatedly that Guyana could determine whether local content should be included in the legislation or developed separately as a policy.
“No we don’t! The law is and that is set out under the Petroleum Exploration and Production Act and regulations that in applying for a prospecting licence, you must present your proposals for local content in respect of a prospecting licence … So all the things they are saying are incorrect,” he added.
Further, Ram said, “I think it is sad that we have to have a foreigner tell us what local content should be, and that to me is the irony. I don’t think Trotman is acting from a position of total ignorance.”
“I don’t think he is bothering to read the law and he is getting people to come and advise him who are just as ignorant. I am sorry to say, I have to be blunt because if he does not as a lawyer accept what the law requires then I can’t say what he is going to do.
Quite frankly I don’t think Mr Trotman has done a great service to this country in relation to his portfolio as Minister of Natural Resources,” he added.
The Local Content Plan and what it will do for Guyana has been a burning question since it was announced that oil was found in the Stabroek Block. Expectations were initially tempered by statements to the effect that few job opportunities would be created by commercial exploitation of this oil find, but the company has since said it will help with local content delivery.
When ExxonMobil was granted a production licence in June of this year, Minister Trotman had given the company a six-month deadline in which to submit its Local Content Plan to the Government.
ExxonMobil’s Guyana Country Manager, Rod Henson, had announced that the company would be relocating its onshore operations, which were used for support services, from neighbouring Trinidad and Tobago to Guyana.
He said it was not the case that ExxonMobil would be looking to build a facility for its support services, but would rather put out tenders, and anyone interested in providing the shore-based services could present a proposal.
Trotman had, in 2016, announced that Cabinet had given its ‘no objection’ to the establishment of the onshore industrial site on Crab Island, in the mouth of the Berbice River. He had said it would be forged through the joint efforts of the Ministries of Natural Resources, Public Infrastructure and Business.
Construction was announced for early this year, and the investments from the Private Sector and Government’s infrastructural work and support were to be equivalent to US$500 million; but the Crab Island facility is yet to materialise.
However, the draft Local Content Policy has been criticised in recent months for lacking provisions which would safeguard against exploitation by companies. The document does not cater for issues such as how to avoid procurement fraud, conflict of interest and favouritism, among others.
Instead, the draft Local Content Policy framework seeks to address, the suite of opportunities that may arise and the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses.