22 C
Georgetown
Tuesday, October 27, 2020

Instead of strict requirements, Guyana could incentivize companies to achieve local content targets – Dr. Marcel

Must Read

PETRONAS reports 2 dead in vessel collision with platform structures off Malaysia

Malaysian oil and gas company PETRONAS said Tuesday an incident involving a vessel which made contact with platform structures...

As Guyana FPSO orders grow, one quarter of global floater fleet under threat of being scrapped

The pandemic-driven downturn in the oil and gas industry is threatening the global floater fleet which could see up...

From jungle training to pandemic relief efforts – CDC volunteers making a difference

The Civil Defense Commission’s (CDC) Voluntary Emergency Response Team (VERT) programme which began in 2018 with support from ExxonMobil...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

When oil producing nations pursue the development of a local content policy, one of the challenges that often emerges, is striking the balance between a policy that is not too rigid and one that’s still not watered-down. As Guyana continues its efforts in this regard, how might it achieve this delicate balance? In the eyes of Chatham House Associate Fellow, Dr. Valerie Marcel, the task before Guyana is certainly not an insurmountable one while adding that it is one that most emerging oil producers and even established producers have struggled with.

During a recent appearance on local radio programme, Guyana’s Oil and You, Dr. Marcel said the criticism of a policy that is all voluntary is that it might attract the oil companies while giving them the freedom to design what it believes to be appropriate for the country’s context. The industry expert said that the flip side of this happens to be criticisms that not much is achieved since the company is not required to meet certain targets.

“If you have a more rigid and regulatory-based, rules-based system, where you say to the company that you must achieve this target, this amount in local staff, this amount invested for this result – the challenge for that approach is perhaps whether the government is asking the International Oil Companies (IOC) something that is feasible, something that is realistic,” Dr. Marcel said.

Local content requirements must be flexible, realistic – Angele Ramsaransing-Karg

The Chatham House Fellow opined that it is a very difficult task for the government to set appropriate targets since it would have to have a very good view of what the company will need and know beyond the shadow of a doubt that it can supply and make those match exactly.

“If you don’t make that match properly then the company is going to appeal that it was not realistic, and perhaps face a small penalty or some such thing,” she stated. “I think what could be, well, I wouldn’t say it the best way, it seems to be quite appealing, is to have something in between where you incentivise companies to achieve something significant.”

She added, “For example, by making local content a biddable term when companies apply for license, or that in the procurement, the local content is one of the biddable terms. That’s just a way of getting results without forcing the hands of companies.”

If Guyana wants to call the shots however, Dr. Marcel said it would be useful to look at the case of Uganda. She said that this nation took a smart approach towards local content, in that several studies were done on what the country had versus what the companies would need on a year by year basis. Where the African nation was lacking, Dr. Marcel said training programmes were created to close the gap.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Venezuela crude inventories mount as exports drop ahead of sanctions deadline

(Reuters) Crude inventories at Venezuela’s main oil export terminal, Jose, have hit their highest levels since August as customers...

BP drops operatorship of sensitive exploration block offshore Brazil

(S&P Global Platts) BP has handed over operatorship of an environmentally sensitive exploration block offshore Brazil in the Amazon Delta to state-run oil company...

PETRONAS reports 2 dead in vessel collision with platform structures off Malaysia

Malaysian oil and gas company PETRONAS said Tuesday an incident involving a vessel which made contact with platform structures occurred at the Baram field,...

As Guyana FPSO orders grow, one quarter of global floater fleet under threat of being scrapped

The pandemic-driven downturn in the oil and gas industry is threatening the global floater fleet which could see up to a quarter of the...

From jungle training to pandemic relief efforts – CDC volunteers making a difference

The Civil Defense Commission’s (CDC) Voluntary Emergency Response Team (VERT) programme which began in 2018 with support from ExxonMobil Guyana, the University of Guyana,...

More Articles Like This