US$100,000 contract awarded to Local Content consultant
– Harmon says ball in Energy Dept’s court to amend principal Act/law
A contract to the tune of over US$100,000 was awarded to British local content specialist, Dr Michael Warner for individual consultancy services to the State pertaining to the oil and gas sector.
This is one of several contracts that have recently been approved by the Government.
Warner is presently the Director for Local Content reporting, Sustainable Business Group of the DAI Global.
It was DAI Global that helped to launch and then manage ExxonMobil’s Centre for Local Business Development (CLBD) based in Guyana. Warner has also presented on Guyana’s own draft Local Content policy, where he gave it positive reviews.
“For individual consultancy for local content in the oil and gas sector in Guyana, Ministry of Natural Resources, the sum of US$104,500 has been awarded to Dr Michael Warner,” Harmon announced.
When it comes to the Department of Energy’s recent statements that it wants the principal act reviewed before the start of a new licensing round, Harmon explained that in such a scenario the ball was actually in the Department’s court.
“Legislative drafting does not start in the National Assembly. It starts with the entities that have to deal with that particular matter. So if you’re talking about amendments to the principal legislation, these are matters which have to be dealt with by the Department. Then it goes to the AG Chambers. And normally we put it out for public comment.”
“Also, it is not correct to say these things are stalled… because unless it is ready to be dealt with in the National Assembly, there’s still work to be done at a level that doesn’t require (politicians).”
According to Harmon, there is actually action taking place in terms of Guyana’s preparations for the oil and gas sector. He cited the announcement that President David Granger had assented to the Natural Resources Fund Bill.
“From the beginning of the year, we started passing bills,” Harmon said. “There are several other bills … which are being dealt with and will go to the National Assembly as part of the Government’s legislative agenda.”
“So, there is a legislative agenda, but certainly if the Parliament does not meet, that agenda will in fact be affected. But with respect to the functioning of the Department of Energy, any other bills which come up will be dealt with in the normal procedure.”
After its 10th discovery of oil in the Stabroek Block, ExxonMobil has estimated the recoverable resource in the block to be five billion oil equivalent barrels. At US$50 a barrel, that equates to well over US$200 billion. In addition, an independent assessment, or competent persons report, had found that 2.9 billion barrels of oil existed in the Orinduik Block.
All of this represents a monetary windfall for Guyana, which will be saved and invested through the Natural Resources Fund. Previously, a green paper on the Fund was laid in the National Assembly.
Government had released the draft Natural Resources Fund Bill of 2018, which had proposed, among other things, a 22-member Public Accountability and Oversight Committee that would oversee the management of the Fund and provide checks and balances.
Local content and what it will do for Guyana has been a burning question since the announcement of the first oil discovery in the Stabroek block in 2015. After Exxon first tempered expectations by saying that few job opportunities would be created by oil, it has since said that it would help with local content delivery.
A draft local content policy created by the Government has meanwhile been criticised in recent months for lacking provisions which would safeguard against exploitation by companies, especially since there have been intensified reports of local companies being bypassed for contracts and services, with foreign companies being favoured.
The document does not cater for issues such as how to avoid procurement fraud, conflict of interest and favouritism, among others. According to the draft local content framework document, the policy seeks to address the suite of opportunities that may arise.
It also addresses the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses through training and well-tailored social contributions for greater impact and benefits, among other issues.
Business Minister Dominic Gaskin had announced last year that the second review of the local content policy was expected to be completed by the first quarter of 2019.