Wednesday, November 30, 2022

Guyanese should retain majority stakes, profits in partnerships with foreign businesses – Tucker

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When local and foreign businesses form partnerships to tap into opportunities in the oil and gas sector in Guyana, the Guyanese partner should not just be a majority-owner of the business for it to be considered ‘local’ but should also retain beneficial ownership. This is the position of President of the Georgetown Chamber of Commerce and Industry (GCCI), Timothy Tucker.

Beneficial ownership refers to who ultimately benefits from the proceeds of the company.

Speaking during an interview on the Guyana’s oil and You radio programme on Thursday, the GCCI President stated that the Chamber is not opposed to the presence of foreign businesses in Guyana, but in fact encourages local companies to partner with these foreign companies to benefit from their knowledge and expertise in the sector. However, at the same time, Tucker emphasised the importance of local content.

According to Tucker, local content “defines what the country is expecting and what our future holds…Local content is generally what we’re going to get as a nation from this find…Local content is the guaranteed way for Guyanese to benefit from the natural resources that we have found offshore Guyana that will be developed.”

The draft ‘Local Content Policy for the Development of Guyana’s Petroleum Economy’ which has been crafted by the government defines local content as the sum of inputs of local goods and services, including employment, provided to oil the and gas operations. The GCCI official posited that local content does not have to result in foreign businesses being locked out of Guyana, but he stressed the need to ensure that Guyanese benefit from the industry and are not used by foreigners to claim the opportunities.

He stated that where partnerships between locals and foreigners are formed, it should not be a case where the Guyanese only owns at least 51 percent of a company, but the foreigner has all the voting rights and majority profits. “That’s not local content, that’s rent a citizen basically,” he iterated candidly.  Tucker said that the GCCI would like to see locals retaining voting powers and at least 51 percent of the profits, later adding, “We are not dictating what people do with their profits, but we believe that a lot of the spend and re-investment should be in the country, that’s what we mean by local content.”

According to the draft Local Content Policy, a Guyanese or local company is one that is beneficially majority-owned by a Guyanese citizen –with at least 51 percent of stakes belonging to the local. Meanwhile, ‘Foreign-Owned, Registered in Guyana’ companies are those that are less than fifty-one percent owned by Guyanese. Further to this, the GCCI President said the Chamber is firm on their position that Guyanese companies should be given first consideration for contracts in the sector, as long as they are qualified to meet the requirements of the contract.

Meanwhile, Executive Director at the GCCI, Richard Rambarran noted that the business support organisation continues to be supportive of partnerships and joint ventures in the oil and gas sector, as well as peripheral sectors that serve and benefit the industry. This, he said, has been encouraged through trade visits to other oil-producing countries. “There are fields where Guyanese do not have the experience or the exposure within an international business sense. Therefore, it would be more beneficial for a Guyanese company to be able to partner with someone as opposed to being locked out of an industry completely,” he added.

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