Amendments to Companies Act needed to ensure those benefiting from O&G are ‘local’ – GCCI President

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Amendments may have to be made to sections of Guyana’s Companies Act to ensure that businesses registered to operate in the South American country have put adequate measures in place to be considered ‘local’, and in so doing, benefit from opportunities in the oil and gas industry.

Questions have been raised in the emerging oil and gas producing country regarding the criteria being used to determine whether a company is truly ‘local’. Stakeholders in the business community, in particular, have been wary of foreign-owned entities registering in the country and securing contracts with companies in the petroleum industry.

OilNOW recently spoke to the President of the Georgetown Chamber of Commerce and Industry, Deodat Indar, on the matter of local content and the criteria for determining who should be considered by oil companies and their contractors, as local operators.

“You have to first look at the Companies Act to see what the definition of a resident company is. Now, residency – that has to change. For you to really be local and the substance of being local, you have to look back at the Companies Act,” he said.

The GCCI President recounted that he had shared this concern with the consultant who was hired by the Guyana government to develop a local content policy framework. The consultant, Anthony Paul, has since submitted his final version of the draft document to authorities for review.

Indar said in other jurisdictions residency is determined by the number of local employees a company has, the location of its head office and where board meetings are being held. “Those things are indications of where you are a resident, particularly for tax purposes. So if you work with that train of thought and apply it to Guyana to determine if a company is local, I think a lot of them that are here registered, would not fit that bill,” he pointed out.

GCCI has been vigorously lobbying for the introduction of local content legislation that would allow for Guyanese companies to be given first preference in instances where they possess the ability to provide goods and services to the oil and gas industry. The government, on the other hand, has signalled its intent to introduce a policy framework that is intended to act as a guide to companies on how the matter of local content should be approached.

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