Local content policy currently being reviewed – Pres Ali

…says focus on new, expanding targets for services

As promised by the People’s Progressive Party/Civic (PPP/C) Government, the Local Content Act 2021 is currently being reviewed, with the aim of either adding new areas for locals to provide service to the oil and gas sector, or improving on the existing clauses.
During his recent end of year press conference, President Dr Irfaan Ali spoke about the ongoing review. Asked if he was satisfied with the impact the Local Content Act has had on Guyana, the President expressed satisfaction with the results so far while also looking forward to future improvements.
“As a Government, we continue to set ourselves high standards. So, when we achieve one target, we set ourselves a higher target. So, we are satisfied with the results, but we have set ourselves new targets. That is why we’ve said in the Local Content legislation, that there will be a period for review. That review is ongoing right now.”

“To see what new services can be added. How we can increase the targets for existing services. And as you’re aware, the local private sector has invested heavily, expanding their own scale of operation. Expanding and diversifying their base of services they can provide. So that will be taken into consideration,” the Head of State said.
There are 40 areas in which oil companies have to seek services from local providers, to varying degrees. For instance, 100 per cent of immigration support, work permit and visa application, customs and ground transportation, as well as insurance have to be sought from local service providers by the oil companies.
Meanwhile, other targets 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; 75 per cent local supply of food; and 90 per cent local accounting services.
“As a matter of fact, the insurance companies are addressing us right now… so that’s an ongoing process. And that’s a consequence of success. And that’s why we built that mechanism in place, where there will be an annual review to add. Because we expected, with the type of policies we’re pursuing, the local private sector to invest and to grow. And we’ve seen it,” the President explained.
The Head of State went on to compliment the local private sector for their forward thinking and willingness to take risks, making it clear that he wants to “compliment the local private sector for the manner in which they’re growing and expanding themselves to get the maximum benefit out of this.”
As of November 2024, it was reported that 1032 companies were registered with the Local Content Secretariat, meaning they are in possession of a Local Content Certificate to confirm they are a Guyanese company and are eligible to supply oil and gas operations.

President Ali had noted in April 2024 that there had been an over 20 per cent increase in value through local participation from 2022 to now, representing an increase of US$84 million and a total of US$524 million.
The Guyanese leader had also explained that for 2024, the Local Content Secretariat estimates that procurement activities would have increased to US$550 million, a 5 per cent increase from 2023 and a 25 per cent increase from 2022.
In December 2021, the National Assembly passed the Local Content Act, which 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.
As of last year, the Local Content Secretariat had recorded a 15 per cent increase in the number of youth-owned businesses registered with the secretariat to supply goods and services to the oil and gas industry. (G3)