Saturday, January 28, 2023

Guyanese taxpayers will have to foot the bill for any inefficiencies triggered by local content rules – Floyd Haynes

Must Read

OilNOW is an online-based Information and Resource Centre

Forcing oil and gas companies to utilise local firms that do not yet possess the necessary skills and capacity will cost Guyana in the long run. Professor and Member of the country’s Local Content Panel, Floyd Haynes, recently shared this position during an online discussion.

The draft revised Local Content Policy document which is now out for consultation outlines–in Section Seven– the mandatory local content targets for companies in the oil and gas sector. The document states that in order to ensure maximum participation of local suppliers in the petroleum sector and development of Guyanese persons, companies will have to comply with a series of sliding scale targets. The section outlines local content levels to be attained under various, specified categories from the date of effectiveness of the licence or petroleum agreement, to varying time frames such as in three, five, seven and ten years.

Lending his voice to the discussion, Professor Haynes stated, “We cannot just insist that Exxon hires Guyanese and Guyanese companies without ensuring that these companies are adequately trained and prepared because if we do that and those individuals are not properly trained, it increases the cost of doing business and that cost rebounds to us as part of cost recovery, so the Guyanese taxpayer ends up paying for any sort of inefficiency.”

He is adamant that a balance between local content and capacity needs to be struck.

Vice President, Dr. Bharrat Jagdeo, appearing on the same forum agreed on the sentiments relating to finding a balance. He said, “We don’t want to put something on paper that’s totally unrealistic.” However, he emphasized, “We have already made it clear. We plan to carve out some areas exclusively for Guyanese where we can supply the services.” The Vice President says that the approach will be balanced, “but tough.”

He described the Local Content Policy as a crucial piece of legislation. “There is no benefit in developing this sector if our people cannot share the prosperity that comes from it and we made it clear…from the very beginning,” he pointed out. “We said that Guyanese have to share the prosperity and we made a manifesto promise that we will ensure strong local content legislation, not just a policy but a policy underpinned by legislation.”

He noted that, often, there is no penalty for not fulfilling a policy but stressed the local content legislation will have penalties for non-compliance.

- Advertisement -

Latest News

Uaru subsurface installations will be “twice as big as Yellowtail” – Hess

ExxonMobil’s fifth project in Guyana, Uaru, is shaping up to be a giant undertaking both in terms of its...

More Articles Like This