Last week a “Local Content Panel” was appointed by President Irfaan Ali to advise him on the finalisation of the “Local Content Policy” (LCP), which had been left incomplete by the previous APNU/AFC Administration even as the Exxon-led consortium has been lifting oil since December 2019.
The new administration now has to play catch-up. The point about crafting an LCP was for the country to extract the maximum benefit from the oil extraction process, which in our case is centred 110 miles out in the Atlantic Ocean, in addition to the paltry bonus and profit sharing that was accepted by the departed coalition.
In terms of the oil extraction process, there was no possibility of any Guyanese being involved in the exploration stage, since this was a very specialised area performed by foreign entities in which no Guyanese had the necessary expertise. However, in the drilling stage, which began in 2018, at one stage there were 23 Guyanese in the 160-person crew of the drill ship the “Noble Bob Douglas”: 14 in the catering operations, four roustabouts (unskilled labourer), two clerks, one doctor, and two logistics support personnel. As can be gleaned, these were generally unskilled workers who would not be adding much value to the Guyanese economy, especially when it was revealed that they were being paid at a fraction of the rates of foreign workers – even Trinidadians.
The actual lifting of the oil from under the ocean is done by massive “Floating, Production, Storage and Offloading” (FPSO) vessels. The operational Lisa Destiny can process up to 120,000 barrels of oil per day, brought up from the seventeen wells; and store more than a million barrels, which would then be loaded directly to oil tankers berthed next to it. These FPSOs, however, are extremely automated, and the Lisa Destiny needs only 80 workers. Last week, 24 Guyanese technicians returned from an Exxon 18-month training programme in Canada to begin working on the Lisa Destiny, but it will take years for them to replace the foreign workers they will now understudy. Eventually, Exxon projects, they will utilize 5 FPSOs by 2025, that are expected to produce between 750,000 and 1million barrels of oil daily. The employment of Guyanese in the drilling and extraction phases, it can be seen, will not number beyond “hundreds” at the very best.
Exxon, however, has announced that at this stage, with only one FPSO in place, 3400 persons are employed on and off shore to support its operation – 1700 of them being Guyanese. Undoubtedly, there are several on shore operators, like the Schlumberger, but in terms of trained workers, the largest supplier has been the Trinidad Company TOTALTEC, which last year announced it had trained some 126 Guyanese workers, of which Schlumberger hired 18. More than likely, the vast majority of the claimed 1700 workers associated with Exxon’s oil operations would be untrained, low-paid persons.
Part of the problem with Guyana really benefiting from “Local Content” is that none of the three policy drafts that the APNU/AFC regime commissioned was based on an Industrial Baseline Study (IBS) that are first routinely done by new oil producing states. The IBS looks at the needs of the emerging oil sector, surveys the existing businesses in the country, and identifies strengths and weaknesses in the state’s goal for its citizens to benefit maximally from the extraction of a resource that they all own.
Over in Suriname, for instance, the state’s oil company, Staatsolie- commissioned IBS showed that the country’s business community was not quite ready to deliver goods and services to the offshore oil industry.
More importantly, however it identified areas that the Local Content Policy, which like ours is now being finalized, should address. In Guyana, the APNU/AFC regime placed the cart before the horse and allowed Exxon to launch a “Centre for Local Business Development” in Georgetown in collaboration with DAI Global, LLC, the same company that did Suriname’s IBS, to determine Guyana’s needs.
