“Unrealistic” local content recommendations can shut down oil industry – VP

Guyana’s local content legislation will be fashioned to include a significant Guyanese-based workforce in the petroleum industry, but unrealistic recommendations for the document can cause the industry to collapse.
Vice President, Dr Bharrat Jagdeo outlined on Monday that since the draft Local Content Policy has been publicised for consultation, a plethora of recommendations have been recorded. However, some of these are “unrealistic”, given the country is yet to build local capacity.
“I have seen here a lot of our people put down several things and some are totally unrealistic. You’d shut down the industry if you go into those. But there are some areas that we have made it clear from before that are 100 per cent carved out for Guyanese,” said Jagdeo.

Transportation, space rental, local logistics, security, janitorial services and food supplies are among the areas which 100 per cent locals will be involved. This, he outlined, would allow for hundreds of millions of dollars into the Guyanese economy.
Moving forward, the Vice President said the country will eventually build human resources to service other domains, providing employment in the fabrication and engineering services. But to ensure consistent production, some foreigners would have to be employed.
“Leaving out the fabrication and engineering services which we’d have to work, we have to see that we have realistic goals there because we’re still putting together the skills and stuff in these areas and you can’t slow down the industry. These are critical areas for us that by law, would allow much more to flow.”
Jagdeo pointed to the creation of a national training institute next year, which will aim to train some 1000 persons per year. Government is looking now to train 600 to 700 welders in a short-term certification programme to support the oil sector.
Since Guyana has agreed to use Ghanaian expertise to set up a strong architecture for the sector’s management, the former Head of State said their local content document is very “attractive”.
“In Ghana’s case, it’s 51 per cent ownership by a Ghanian person, 80 per cent of management and 100 per cent of unskilled labour. That is how they define a local company. It’s very attractive from what I see,” he added.
After assuming office in August last year, President Irfaan Ali established a High-Level Local Content Panel to review policy initiatives on local content in the petroleum sector and provide guidance for the development of Guyana’s Local Content Policy and Legislation.
The panel, chaired by Shyam Nokta, compiled and submitted the Local Content Report. Also on the panel were Carl Greenidge, Carvil Duncan, Anthony Paul, Kevin Ramnarine and the Natural Resources Ministry’s Legal Officer Sasha Rajkumar-Budhan. The end product was a list of recommendations, and subsequently a draft Local Content Policy that the Government had released in February of this year.
The stakeholders’ consultation on Guyana’s draft Local Content Policy for its petroleum sector started in February, and President Dr Ali himself opened the discussion, from which authorities were expected to receive feedback and comments for the finalisation of the critical document.
Approximately 140 stakeholders were engaged by the panel on the compilation of the report. The report outlines several recommendations to improve the country’s policies and legislation.
Among the key objectives of the Local Content Policy are: to enhance the skills and competencies of Guyanese citizens; promote maximum use of Guyanese in the petroleum sector workforce; maximise the use of locally sourced goods and services in the petroleum sector; enhance the capacity of Guyanese businesses and supply chains to become internationally competitive; enhance and make world-class the training, technology, innovation and research and development base of Guyana, just to scratch the surface. (G12)