Businessman and former Georgetown Chamber of Commerce and Industry (GCCI) President Timothy Tucker has warned that Guyana’s efforts to broaden participation in the oil and gas sector through local content measures could be undermined by the continued re-bundling of services by some local contractors.
Speaking on the Starting Point podcast on July 5, Tucker said that while the Local Content Act helped break down large contracts into smaller opportunities for Guyanese businesses, the practice of combining services has again reduced access for smaller players.
“There was a bundling of services, so they [oil companies] would send out a logistic contract that had transportation, logistics, custom brokerage, chandlery, all the different supplies in a logistic contract, and so we [GCCI] pushed to have that separated into six different contracts…So more people can get a slice of the pie. Now we’re seeing the local contractors who’ve gotten that slice of the pie now re-bundling the services at a lower level,” he said.
Tucker acknowledged that there are practical reasons for combining some services, including the cost of meeting industry requirements. He noted that smaller companies may struggle to take on individual service contracts if they are required to absorb high costs.
However, he explained that continued reliance on this practice could limit the level of participation that local content efforts sought to achieve.
“So we understand in certain aspects why they have to re-bundle the service, but we ask for as many local contractors as possible. So those are some of the things that we really have to go back and look at and see how we can rectify and fix those things so that more Guyanese have the ability to service the industry than just a few,” he said.
Guyana’s Local Content Act, enacted in 2021, established requirements for Guyanese participation in the petroleum sector through employment targets, training obligations, procurement requirements, and 40 reserved service areas. The framework also requires oil and gas companies and their contractors to submit annual local content plans outlining how they will meet these obligations.
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The Local Content Secretariat monitors compliance with approved plans and assesses areas where the framework can be strengthened.
