Home Top Stories Guyanese expanding services in oil & gas linked to enacted Local Content...
– lists local content as top highlight during 2-year tenure
A nexus can be drawn between Guyanese companies being able to expand the services they provide to companies in the oil and gas sector and the Local Content Act and related policies that provided the space for them to partner with foreign companies while they built their capacity.
This is according to former Georgetown Chamber of Commerce and Industry (GCCI) President Timothy Tucker, during a recently broadcast interview with OilNow. In fact, in reflecting on the achievements during his tenure of 2021 to 2023, Tucker put local content at the top of the list.
“I think to see local content to its fruition. The President, I was standing behind him when he signed local content into law. And I think that is something that we started. It took a long time. We were screaming and shouting at people, when they didn’t understand it. We had our internal fights, within the private sector. Within our own chamber. On whether or not it is what is right for Guyana. We debated that. Of course, we have companies within the oil and gas sector that are our members. And we had to represent them as well.”
“So you’re dealing with companies who want to get into the sector and you’re dealing with companies who control the sector. They thought that local content would slow the sector down. And for us, we were saying to them, you’re not giving us any opportunities. You’re not showing us where the opportunities lie. And we glad to get local content to open those doors,” he said.
Tucker applauded the rate at which Guyanese have expanded the services they can provide to oil and gas companies, stepping out from the previous 40 areas of opportunities for local content and building capacity along the way. As a matter of fact, Tucker noted that this expansion would not have been possible without local content – which itself would not have been possible without the Local Content Act of 2021.
“We did a review with the Private Sector Commission, at the local content forum. And we started with 40 areas. And now you’re seeing an additional 25 areas being up. Guyanese have the capacity to now do 65 things and even more. I think the chamber has identified another seven or eight more. So, you’re at all in all, [over] 70 areas. Almost doubling the 40 areas that we’ve recommended.”
“Guyanese are now investing in pipe coating, vessel services, they’re going into things that people said first Guyanese can’t do. We’ve been able to go and find partners, bring them, and get these things done. Mind you, those partnerships would not have happened without local content,” Tucker further affirmed.
Moving forward, Tucker noted that an area the Government can focus on is reviewing the law to ensure all loopholes are closed. According to Tucker, one loophole foreign companies have been exploiting is the definitions surrounding a “local company”, whereby they “rent” a citizen to meet the requirements for a local company. He noted that these infractions and more, are things the private sector must support the Government in tackling.
“Rent extraction will create a foreign currency crisis, and will reduce opportunities for locals in terms of benefitting from local content. Few people will actually be able to get anything from it… it’s important that we work as a private sector organisation, and that we continue to support the Government in terms of the regulations. Basically, calling out those who have been breaching this act and gives the Government the tools to investigate these things and correct the wrongs. At no point should we stand by.”
The Local Content Act lays out 40 different services that oil and gas companies and their subcontractors must procure from Guyanese companies by the end of 2022. For instance, these companies must procure from Guyanese companies 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 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. These fines range from as low as $5 million to as high as $50 million. Consultations are meanwhile currently underway, with the aim of updating the Act. (G-3)
