Page 5 - LatAmOil Week 12 2021

LatAmOil COMMENTARY LatAmOil

President Irfaan Ali’s administration intends between local content and local capabilities, he
to reform existing laws and introduce new commented.
legislation in order to maximise transparency, “We cannot just insist that [ExxonMobil]
accountability and good governance in the sec- hires Guyanese [workers] and Guyanese com-
tor, he said. panies without ensuring that these companies
Guyana will also take steps to follow interna- are adequately trained and prepared ... [If] we
tional best practices, he added. do that and those individuals are not properly
Additionally, the minister said, the govern- trained, it increases the cost of doing business.
ment is making progress with respect to formu- And that cost rebounds to us as part of cost
lating a policy on local content requirements. recovery, so the Guyanese taxpayer ends up
Once it has completed this process, he said, it paying for any sort of inefficiency,” he remarked.
will be in a position to draw up the necessary The Guyanese
legislation. “Share the prosperity”
He did not say when Georgetown might During the same online discussion, Vice-Pres- government has
reach this milestone, but OilNOW.gy reported ident Bharrat Jagdeo also stressed the need for
last week that the government had already balancing the needs of investors with support for already drawn up
drawn up a draft version of the policy. This doc- local companies. “We don’t want to put some-
ument is now out for consultation with respect thing on paper that’s totally unrealistic,” he was a draft version
to its seventh section, which covers mandatory quoted as saying by OilNOW.gy. of its policy on
local content levels in the oil and gas industry. In He also stressed, though, that Georgetown
its current form, it takes a sliding-scale approach was determined to see local companies gain a local content
to local content, changing the requirements for foothold in the oil sector so that they could reap
different time frames such as three, five, seven the benefits of oil and gas projects. “We have requirements
or 10 years from the start date of a contract or already made it clear: We plan to carve out some
transaction. areas exclusively for Guyanese where we can
supply the services,” he said.
Striking a balance on local content Accordingly, the government will take
Bharrat went on to say that he hoped local com- an approach that is balanced “but tough,” he
panies would use the time leading up to the stated. It will, for example, impose penalties for
adoption of the local content policy to improve non-compliance with local content rules, he
their performance. The Ali administration explained, without saying what those penalties
wants to ensure that Guyana’s economy and might be.
workforce develop in a way that supports the Jagdeo also pointed out that President Ali
needs of the oil industry, he said. and his team did not consider local content to
Floyd Haynes, a prominent Guyanese be a purely administrative matter. It is crucial
accountant who serves as a member of the gov- for the administration to introduce legislation
ernment’s Local Content Panel, made similar on this front, he said.
remarks last week. In an online discussion cited “There is no benefit in developing this sector
by OilNOW.gy, Haynes said that developing a if our people cannot share the prosperity that
local content policy was not enough. comes from it, and we made it clear ... from the
If Guyanese companies cannot offer goods very beginning,” he declared. “We said that Guy-
and services that investors in the oil sector need, anese have to share the prosperity, and we made
the economy is likely to suffer in the long run, a manifesto promise that we will ensure strong
even if it adopts sound policies, he said. As such, local content legislation – not just a policy, but a
the country must work to establish a balance policy underpinned by legislation.” ™

ExxonMobil has discovered 18 oilfields at Stabroek, which is thought to hold 9bn boe (Image: ExxonMobil)

Week 12 25•March•2021 www. NEWSBASE .com P5