By Dr. Lorraine Sobers
Guyana’s oil production is set to ramp up rapidly in the next 5 years, but this is just the beginning. By early 2022, production will reach 340,000 barrels of oil per day (bopd) with the arrival of the second floating production storage and offloading (FPSO) vessel. Recent estimates forecast production to escalate to 1 million bpd by 2027- just over 1 barrel of oil per day per capita. Recoverable oil resource estimates have been recently revised upward to 10 billion oil equivalent barrels accounting for recent discoveries made in September 2021. The Guyanese Government is attempting to ensure that this windfall results in maximum participation and benefit to citizens by establishing a Local Content Policy (LCP). However, the latest draft of the LCP outlines requirements to multinational oil companies (MOCs) that will be difficult to achieve and sustain without massive improvements in the education system.
This draft of the LCP has a clearly stated intention for “enhancement of the University of Guyana” and the Government Technical Institute” for adults interested in the energy sector. But this and other training initiatives will only be successful if sufficient students emerging from the Guyanese secondary school system are prepared for advanced technical programs. Several indicators suggest that the majority are not. At present, relatively few enter the field of engineering, the crux of the energy sector, and fewer will be able to rise to upper management. Regional and international academic tests prove that Guyana needs a higher proportion of students graduating with strong math, reading comprehension, critical thinking and problem-solving skills. Guyana needs to aggressively pursue a vastly improved quality of education for a greater proportion of Guyanese children in the primary and secondary school system right now. Enhancements of tertiary education institutions alone will not suffice.
It is arguable that implementation of the proposed LCR sliding scale for goods and services may depend more on timely generation of sufficient numbers of capable persons coming through the education pipeline than the will of MOCs to preferentially select Guyanese individuals and businesses to provide these goods and services. This is evident in Guyana’s relatively low Human Capital Index (HCI) of 0.5. This index, developed by the Human Capital Project, is a composite of health and education quality indicators for the average citizen. An HCI of 0.5 means that the maximum efficacy the Guyanese LCP can realize from citizens, on average, will be 50% of what it can be. In turn, half of the time and money channeled into tenets of the LCP: knowledge and technology transfer, preferential access, special oversight committees, business opportunities, transparent procurement policies, enhancement of sectors, will fall short of the intended outcome.
There are four shortcomings in the education system that must be urgently addressed: 1) shortage of trained teachers, 2) urban-rural education inequality, 3) secondary school students’ performance in mathematics and science and, 4) access to Information and Computer Technology (ICT). Different aspects of these shortcomings have been studied and presented in detail in academic papers and successive Ministry of Education Strategic Plans. Increasing the number of trained teachers and improving rural education quality are the most critical. A solid foundation at the primary school level leads to improvement in performance through to secondary and tertiary education which feeds into the availability of professionals to provide the technical goods and services required by the energy sector.
Decades ago, Qatar, Saudi Arabia and Trinidad and Tobago faced the blessed challenge of developing their petroleum sectors by making significant changes throughout their education system. Notably, Trinidad and Tobago undertook an overhaul of its British-based education system soon after becoming an independent nation in 1962. As a result, by the late 1970s ample Trinidad and Tobago nationals were available to build, operate and, later on, expand into a world-renowned downstream natural gas-based sector. Overall this approach has been successful in producing abundant, capable professionals and technicians to bolster expansion of upstream exploration and production activities and support services for over 40 years. There were significant improvements in the quality of school facilities, teachers’ training, greater access to and more options for technical and vocational training alongside academic subjects for students at all competency and income levels.
In addition to addressing shortcomings in the availability of universal education, a benchmark study can provide an estimate of the number of Guyanese required now, and in the future, to fulfil the proposed minimum LCR. An LCP based on this dataset will ensure alignment of the LCR to empirically determined goals. This data driven approach will mitigate ad hoc policy implementation that can severely hinder the pace of development and/or foster the abuse of loopholes.
Guyana has an awesome, thrilling challenge to administer the LCP for the ‘Development of Guyana’s Petroleum Economy’. In a few months the final version of this policy will be adopted with the overall goal “to maximise the level, quality, and benefits of participation in the petroleum sector value chain by Guyanese”. Certainly, Guyana has a retinue of capable professionals on hand, but many more are needed to increase the level, quality and volume of Guyanese participation in every area of economic prosperity and growth. The success of the LCP depends on the majority of Guyanese children having early access to a higher quality of education that equips them for the tectonic task ahead.
About the Author
Dr. Lorraine Sobers has 18 years’ experience in the energy sector. She is a Reservoir Engineer and lecturer at the University of the West Indies, St. Augustine. She is also the Project Coordinator for CO2 Emission Reduction Mobilisation Project and a Junior Fellow of the Caribbean Policy Consortium.