The coming of oil and gas has led to an influx of foreign entities into the nation’s borders. Many of these companies will be competing for contracts to supply goods and services at a national level.
While the Government may be smiling from ear to ear with this investment boom that is set to take place, local stakeholders are cautioning that businesses here should not be left out in the cold.
In fact, Mr. Charles Ceres, Managing Director of Ground Structures Engineering Consultants (GSEC) made a call yesterday at the Marriott Hotel for the Government to integrate local content into the evaluation process for the award of contracts.
Ceres was at the time delivering his perspective on global experiences in developing an oil and gas sector. This was just one of the many subject areas covered at the Guyana International Petroleum Business Summit (GIPEX).
His presentation focused on the work his company has been doing thus far as it relates to local content preparedness in Guyana.
The engineer noted that one needs to recognize that potential overseas partners will require first world level skills. In this regard, he commented that it would therefore call for an investment in training and technical resources to ensure that the expertise provided is second to none.
Ceres said that this ensures that potential partners are secure that the said company can appropriately respond to its needs.
“In our case, we have been probably the sole provider of local content to international companies in the mining industry prior to the discovery of oil in Guyana. In fact, in 2008 we supported Canacol’s environmental compliance efforts for the drilling of several wells in the Takutu Basin. We have provided geotechnical engineering, environmental compliance and groundwater hydrology services to companies such as Guyana Goldfields, Troy Resources, Sandspring Resources, the former Omai Gold Mines etc. We have provided services outside of Guyana – in Suriname, Trinidad, Grenada, St Lucia and the US.”
Ceres continued, “Our ability to respond in a technically sound manner to the demands of our clients mandated that we implement training programmes which provide our staff with the skill set demanded by these firms. It also meant that we had to acquire first world equipment to service their needs. This saw the introduction of a fully digitized soils and materials testing laboratory.”
Ceres added, “Consequently, when we formed an alliance with Fugro, our staff was not in awe when exposed to exactly the same equipment in Fugro’s laboratory.”
Fugro is the world’s leading, independent provider of geo-intelligence and asset integrity solutions for large constructions, infrastructure and natural resources.
Furthermore, Ceres said that the acquisition of resources must, of course, be supplemented by training and a commitment to quality. In this regard, his company has expended considerable resources in training persons to be responsive to clients’ needs.
The veteran engineer also stated that Guyana has a very poor culture when it comes to engineering distinction. As such, Ceres was careful to note that his company’s training programme focuses on ensuring persons are part of a company culture of excellence. He said that emphasis is placed on the need to never be satisfied with outputs and to continually push the boundaries to obtain better solutions for clients.
Ceres said that this has resulted in the development of skills in areas as diverse as earthquake wave propagation analyses, geo-statistics and groundwater and surface water quality modeling.
Furthermore, Ceres said that his company has continually sponsored students at the University of Guyana. In fact, GSEC currently has three students under full sponsorship – two in engineering and one in biology.
Ceres said that this is recognition of the importance of young people in the success of his company and “acceptance that evolution dictates young people are smarter than old people”.
“This policy has therefore married the knowledge of the old with the smartness of the young to advance the company and results in early exposure of young people to our company culture while instilling a sense of the need to respond appropriately to clients’ demands. Needless to say, this has resulted in our company having persons who are young and fully supportive of our objectives and who see our field of practice as being an integral part of their future.”
That said, Ceres stressed that local content requires investment in equipment and resources. He said that it has been typical for local companies to await contract awards prior to acquiring resources and equipment.
“That is a policy frowned upon by our firm. We have among our arsenal, equipment which has never been utilized, including water well logging equipment and a drill rig capable of drilling to 1500 metres. While others may see this as a waste of resource, these items provide our staff with exposure to first world equipment and it has worked to our benefit.”
Ceres continued, “In fact, the initial phase of our local content collaboration with Fugro entailed exposure of several of our staff members to Fugro’s facilities which mirrors ours. The training stints were therefore relatively short since it focused more on procedural issues than technical ones.”
According to Ceres, the most important part of local content support is professional integrity. He emphasized that this means walking away from practices which impugn the professional integrity of the company.
“I think that it is well known that we had, and continue to have, a policy of very little participation in public sector projects. Public sector projects, here in Guyana, are driven very little by the need for technically defensible outcomes. The absence of that requirement limits a company’s ability to grow and develop to be able to compete against first world companies.”
He continued, “Local content must also be driven by recognition of the availability of skills locally. I recall having a conversation with an advisor to the present government who was unaware of the existence of drilling expertise in Guyana. I pointed out to that individual that we had in fact done directional drilling here in Guyana in the mineral exploration sector…”
The engineer added, “Local content also mean the building of expertise. Since our involvement with Fugro, our staff has worked in the Gulf of Mexico, off the East Coast of the USA and in the Caribbean. It should be noted that these projects are not all oil and gas related…Local content in our case will consequently bring first world expertise outside of the oil and gas arena to Guyana.”
Ceres is of the firm view that local content must be supported by local decisions. In this regard, he commented that local decisions must be made by local affiliates, and not by persons removed from the local environment.
“This implies that decisions must be made in Georgetown not Houston, Texas. Georgetown is aware of the expenses incurred to develop local expertise. Georgetown is aware of local, proven successes by the entities being considered. Georgetown is aware of the fact that expertise must be developed to be responsive in the long term, and that this will entail some level of support. Georgetown must therefore fight to ensure that local content precedes other considerations, including in some instances, price.”
Ceres strongly concluded that the Government of Guyana must provide oversight to ensure that local content is integrated into the evaluation process for the award of contracts
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