During Monday’s launch of the first round of consultations on Guyana’s draft Local Content Policy, President Irfaan Ali categorically stated that the final document must be one with a difference. The Head of State, who led the discussions at the Arthur Chung Conference Centre on the outskirts of Georgetown, asserted that the essential hallmarks of the policy must be accountability, realistic targets, opportunities for capacity building and incentives that allow Guyanese to benefit the most from their oil wealth.
The President who thanked members of the private sector, key oil majors and other industry stakeholders present at the event, said that the discussions which will last for one month, should not be seen only, through the oil and gas lens. He stressed that it must be in keeping with Guyana’s national development strategy which entails becoming in the long run, a regional hub for health and education services. He said too that Guyana’s ultimate goal is to ensure that its oil wealth is used in a manner that allows for the sustainable development of other industries. A new economy is what his government is eager to build.
As it does this, Ali said he is acutely aware of the fact that the government has to provide an enabling environment for locals to be able to compete in the sector and even internationally. He stressed however that oil companies must play their part too. In this regard, he highlighted the need for there to be targets which industry players must abide by while adding that the government through the consultation process, is hopeful that a middle ground can be met on what is progressively achievable. Additionally, the President said that due attention must be given to having certain services reserved for procurement from Guyanese. He was keen to note that locals, for quite some time, have been in the brokerage business, while adding that there are Guyanese who are investing in storage facilities to be able to access related opportunities in the oil sector.
Further to this, the President said, “We also need to ensure that our businesses understand the supply chain and are able to identify opportunities for what is needed. This is why we are spending so much time to lay out where we want the development agenda to be…”
Speaking to the importance of accountability, the President said that the government needs to work out how it will go about ensuring effective local content audits and finetuning systems to be implemented for monitoring companies.
During his contributions, Vice President Dr. Bharrat Jagdeo stressed that indeed, the bulk of the benefits cannot go to the investors. He said that the people of Guyana must be given ample opportunities to share in the prosperity. While the Local Content Policy will help to ensure this is done, Jagdeo said that the government is also moving to put in place, a new Production Sharing Agreement since the current one is stacked in favour of the oil companies.
The official said that this new document would be used for future agreements while reminding that old deals would not be renegotiated out of respect for the sanctity of contracts.
Returning to the matter of local content, Dr. Jagdeo said that oil companies need to work differently in Guyana. He said there needs to be a leveled playing field in the payment given to locals and foreign contractors or employees.
He also reiterated the need for local content targets while stressing that these would not be unreasonable. The Vice President also supported the President’s call for accountability as he noted that it cannot be left to the good will of the companies to be compliant.