Monday, February 6, 2023

Local content earnings top GY$129 billion, over 350 certificates issued to suppliers

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Guyana’s Local Content Secretariat said Tuesday that it has granted Local Content certificates to 354 Guyanese suppliers, listed on its website.

The coveted certification allows those suppliers to be treated with legally mandated preference by international oil companies (IOCs) and their sub-contractors.

The certificate, the Secretariat explained, is awarded after a rigorous screening process determines that the recipient is a Guyanese national or company.

“This firm system is designed to filter out companies that wish to circumvent the spirit of the law,” a release said.

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The agency’s internal assessments show that Guyanese companies supply goods and services across 37 of the 40 areas ringfenced for nationals in the First Schedule of the Local Content Act, which became law in December.

Director of the Secretariat, Martin Pertab, commented that the unit continues to work alongside and engage with contractors, sub-contractors, licensees and Guyanese suppliers to ensure that the goals of the Act are met. Local content, he underscored, gives Guyanese businesses a fair opportunity to directly tap into and benefit from Guyana’s multi-billion-dollar petroleum sector.

Although not yet complete, the director noted that preliminary assessments show that local content earnings from this year alone are well above GY$129 billion. This massive figure represents 23% of Guyana’s GY$552.9 billion budget for 2022 – the largest recorded budget in the nation’s history.

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Vice President Dr. Bharrat Jagdeo had said that local content is meant to retain some value lost from the Stabroek Block production sharing agreement (PSA), which he said could have been negotiated better on Guyana’s part. In this regard, the expected earnings from local content this year are equivalent to about half of the US$1.247 billion expected to be made from oil production and royalties. This demonstrates local content as a critical revenue earner for Guyana.

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