Guyana President Dr. Mohamed Irfaan Ali believes that 45 days after receipt of a correct invoice is too long a wait period for oil companies to pay their contractors. The President discussed the matter at the Local Content Summit 2024 at the Pegasus Hotel, during which he promised a review of the country’s local content framework.
The Local Content Secretariat had received complaints that some companies were taking months to pay their contractors, and eventually mandated a 45-day payment period in companies’ Local Content Master Plans.
A further reduction could be expected as President Ali said: “We still feel this is too long and we will address that.”
He also said a review of the First Schedule of the Local Content Act is underway to assess and make new targets as the country’s oil sector blossoms. The First Schedule lists 40 categories of services, in the oil sector, for which Guyanese companies are mandated preferential treatment in oil and gas sector procurement.
Over 25 new services identified by private sector for update of Guyana’s local content law | OilNOW
The country’s oil sector has grown with a sixth offshore development (Whiptail) being greenlit. And this, according to the President, calls for a return to the drawing board.
“We have to look at the areas in which we built capacity as a country and to look at the percentages in the different areas because, over the last few years, we have built tremendous capacity in some areas,” he outlined.
Guyana’s Local Content Act was implemented in 2021; the country was building out a robust oil sector, having then been a producer for a little over two years. Now, four years into the sector, the country has learned lessons from challenges, which the President said will be tackled.
“There are still some issues to address…fronting and rent-seeking…that is renting a local company or a local name…that is a hindrance to local content,” he said.
The Secretariat has a unit set up to solely focus on curbing this problem.
