Page 4 - LatAmOil Week 01 2022

COMMENTAR
LatAmOil COMMENTARY Y LatAmOil

President Ali signs local content bill on December 31 (Photo: op.gov.gy)

Two new laws in Guyana

Parliament has passed bills on local content and the sovereign wealth fund

amidst an upsurge of long-standing tensions between local communities

LATE last month, the government of Guyana But there are other large international oil
took two important steps towards establishing companies (IOCs) that have a stake in what hap-
WHAT: its own future economic stability as a producer pens in Guyana, including Spain’s Repsol and
Guyana’s ruling faction of oil and gas. More specifically, it succeeded in China National Offshore Oil Corp. (CNOOC),
has secured passage of securing the passage of a local-content law that as well as smaller independents such as Cana-
key laws on local content aims to foster the development of Guyanese oil- da’s Frontera Energy. Other interested parties
and the Natural Resourc- field service providers (OSPs), as well as a law include the foreign OSPs that have secured con-
es Fund (NRF).
formalising the establishment of a sovereign tracts from IOCs working in Guyana, as well as
wealth fund. local OSPs for which Guyanese oil and gas pro-
WHY: The new laws appear to satisfy most of the jects may serve as a springboard for expansion,
Both bills aim to optimise
the flow of oil revenues corporate players in Guyana’s growing hydro- along with local firms working in related sectors.
into the local economy. carbon sector, and they are in line with the prior-
ities of the ruling party – the People’s Progressive What the laws say
WHAT NEXT: Party/Civic coalition, led by President Irfaan Ali. According to press reports, the laws passed in
One of the underlying However, the 11th-hour scuffle that marked late December are the Local Content Bill 21 of
factors affecting the local debates in the legislature should serve to high- 2021 and the Natural Resources Fund (NRF)
economy is long-standing light the fact that the South American country is bill.
differences between the not free of political and ethnic tensions. The Local Content Bill 21 of 2021 is designed
country’s two main ethnic As such, investors that are working in Guy- to give Guyanese companies an advantage in
groups. ana or considering opportunities there ought to bidding for certain types of service contracts
keep an eye on the political situation. ExxonMo- related to oil and gas projects. The legislation
bil (US), the operator of Stabroek, Guyana’s only states that in 40 specific categories, Guyanese
producing licence area to date, is undoubtedly companies and Guyanese nationals will have
doing so in the interest of protecting its own priority in bidding for contracts for goods and
extensive holdings. services.

P4 www. NEWSBASE .com Week 01 06•January•2022