Wednesday, December 7, 2022

Draft Local Content Law: Guyanese suppliers to benefit from 152 oil sector services

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The Government of Guyana is already in the advanced stages of completing its draft Local Content Legislation which outlines a sliding scale of targets to be achieved by petroleum companies and their subcontractors.

The document proposes that Guyanese should be utilized in 152 oil sector services with increased participation levels over a period of three to 10 years.

For companies with a Petroleum Agreement, the draft legislation states that oil companies must have a management staff with 10 percent being Guyanese at start up, then moving to an increase of  25 percent in five years and then 45 percent in 10 years.

For supervisory staff, it is being proposed that Guyanese account for 15 percent of the oil companies’ staff at start up with a gradual ramp-up to 35 percent in five years, then 50 percent in seven years, and finally, 45 percent in 10 years.

With respect to technical staff, the government is proposing to give oil companies up to 10 years to have Guyanese account for 75 percent of that section of their workforce.

As regards the provision of Front End Engineering Design (FEED) services for onshore facilities, the document recommends that Guyanese suppliers get 20 percent of the contracts in the first year and then 90 percent in 10 years.

For the provision of materials such as steel plates, flat sheers, steel pipes, and low and high voltage cables for the oil sector the government wants Guyanese providing 100 percent of this to the oil sector in 10 years. The government is also proposing that 90 percent of the cement needed for the oil industry be sourced from Guyanese in 10 years.

In the area of transportation, supply and disposal services, the government is recommending that between a period of five to 10 years, 75 percent to 100 percent of the marine gas oil fuel and helicopter services needed for the sector be sourced from locals.

Furthermore, the draft local content document proposes to have Guyanese supply 70 percent to 100 percent of the telecommunications and data management services needed by the industry. This would include network installation and support services software development, computer-based simulations, hardware installation support services, and IT Management consultancy services.

With respect to health, safety, and environmental services, the draft legislation is proposing to have 95 percent to 100 percent of the security, firefighting, electrical, equipment brokerage, vessel tank cleaning, catering, laundry, offshore medical and support, and industrial cleaning services be done by Guyanese in 10 years.

Furthermore, within a six-month period, the government wants several services to be done 100 percent by Guyanese. These include: transportation of goods and services, shipping and logistics services, accommodation services, conferencing facilities, rental of buildings and equipment, surveyors, environmental studies for development projects of each field such as for the FPSO and gas development project, environmental services, pipe weight coating, pipeline installation excluding welding and Non-Destructive Testing services, civil works, structural fabrication, waste management, warehousing facilities, construction services, cleaning services, and catering services.

First Schedule of Draft Local Content Bill (2021) (1)

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