Preliminary figures show local suppliers earned over $129B from oil sector in 2022

– LCS issued 354 certificates since January

Since the People’s Progressive Party/Civic (PPP/C) Government brought the Local Content Secretariat (LCS) into operation in January 2022, preliminary figures show that Guyanese suppliers have earned over GY$129 billion from the oil sector.
This was revealed in a statement from the Secretariat. According to the regulator, it has also issued some 354 Local Content Certificates to Guyanese suppliers of the nation’s oil and gas sector.

Director of the Secretariat, Martin Pertab, was quoted in the statement assuring that the unit continues to work alongside and engage with contractors, sub-contractors, licensees and Guyanese suppliers to ensure that the goals of the Local Content Act are met.
“Local content, he underscored, “gives Guyanese businesses a fair opportunity to directly tap into and benefit from Guyana’s multi-billion-dollar petroleum sector. Although not yet complete, the Director noted that preliminary assessments show that local content earnings from this year alone are well above GY$129 billion.”
“This massive figure represents 23 per cent of Guyana’s GY$552.9 billion budget for 2022 – the largest recorded budget in the nation’s history,” the Secretariat further explained in the statement.
A Guyanese national or Guyanese company issued a certificate by the Secretariat receives preferential treatment in the award of contracts by the oil companies and their sub-contractors. This document confirms that the Secretariat is satisfied that the holder of the certificate is a Guyanese national or Guyanese company.
Oil companies and their sub-contractors are also more incentivised to utilise vendors who were approved by the Secretariat. When registering with the Secretariat, which is free of cost, suppliers are asked to submit certain crucial documents, depending on the type of proprietorship.
Once those necessary documents have been lodged, applications go through a rigorous screening process by the Secretariat’s Registration Unit. This system, according to the Secretariat, is designed to filter out companies that wish to flout the spirit of the law.
“Internal assessments show that Guyanese companies supply goods and services across 37 of the 40 areas ringfenced for nationals in the First Schedule of the historic and innovative Local Content Act.
“In keeping with the provisions of the legislation, all certified Guyanese companies are published via the Local Content Register – a website that the general public can easily access,” the Secretariat said.
Meanwhile, a breakdown of the services Guyanese provide to oil companies includes rental of office space and accommodation, equipment rental (crane and other heavy-duty machinery), surveying, pipe welding, blasting and coating – onshore, construction work for buildings – onshore, structural fabrication, waste management (hazardous & non-hazardous), storage services, janitorial and cleaning services.
Other services include catering, food supply, administrative support and facilities management services, immigration support services, work permits, lay-down yard facilities, customs brokerage services, export packaging/crating, preservation and inspection, pest control/exterminator services, cargo management/ monitoring, ship and rig chandlery, and environmental services and studies.
They also provided transportation on trucking ventilation (private, commercial and industrial), industrial cleaning security services, ICT network installation. There were a number of support services, such as manpower and crewing, dredging, local insurance, legal and medical services, aviation engineering and machining, and local marketing and advertising services.
And since last month, the Secretariat has said that almost all the companies operating in the oil and gas sector have complied with the Government’s new stipulation that they must pay local suppliers for goods and services within a 30-to-45-day period.
In September, the Natural Resources Ministry, through the Secretariat, had modified the five-year local content plan of major oil operators to ensure that contractors and sub-contractors issue payments to Guyanese suppliers within 30 to 45 days following the receipt of a correct invoice.
This was after numerous complaints were made about prolonged delays, as much as 90 days, in the payments for goods supplied or services rendered to major players in the oil and gas industry – an issue that had been engaging the Government’s attention.