Home News Regulatory agency, laws proposed to regulate local content
…body to oversee licensing, performance, database of suppliers
To ensure that Local Content Policy is adequately enforced when the oil and gas sector gets on stream, Government plans to create a regulatory agency tasked with, among other things regulating all suppliers; and this agency would by superintended by a multi-stakeholder group.
This is according to the draft Local Content Policy formulated by the Natural Resources Ministry and seen by this publication.
The policy says legislation is likely to be enacted to set out how Guyanese would benefit, and enforcement would be the responsibility of a well-funded and resourced regulatory institution that would, in turn, be overseen by a multi-stakeholder group representing local bodies that are involved in the sector.
The regulatory agency would also have to report to Parliament, as is customary for most regulators, who report to the Public Accounts Committee or are overseen by the Auditor General and the Social Services Committee.
According to the document, if contracts are awarded by the National Procurement and Tender Administration Board (NPTAB), the regulator will also be tasked with ensuring international operators manage their work according to the local content strategy. This, it says, will apply from the development to operation parts of the project.
The agency’s duties would include monitoring, evaluating, and reporting on the licensing and registration process for all suppliers. It will also be in charge of creating databases for suppliers, local professionals and technicians, as well as projects. It is proposed that the body would also set targets for these projects.
In a recent interview, Minister of Natural Resources, Raphael Trotman, said Government would adopt a “hands off” approach to local content. He was at the time responding to questions on whether more could have been included in the policy to ensure more jobs for locals and more investment opportunities for businesses like suppliers.
“One of the things the business people would tell you is that the market must be allowed to grow. Too much Government intervention is what the private sector says it does not want; so competitiveness is what rules the day,” he had stated.
Local Content and what it will do for Guyana has been a burning question since the announcement of oil in the Stabroek block. After Exxon first tempered expectations by saying that few job opportunities would be created by oil, it has since said it would help with local content delivery.
The oil giant was granted a production licence in June of this year, and Minister Trotman has given Exxon a six-month deadline in order to present its Local Content Plan to Government.
ExxonMobil’s newly appointed Country Manager in Guyana, Rod Henson, had recently announced that the company would be relocating its onshore operations, which were used for support services, from neighbouring Trinidad and Tobago to Guyana.
He had told participants at a meeting that it was not a case whereby 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 base 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$500M; but the Crab Island facility is yet to materialise.