Latest update April 25th, 2024 12:59 AM
Mar 28, 2018 News
…TT Engineer urges authorities to begin serious dialogue on local content
By Kiana Wilburg
With 280,000 barrels of oil per day during the 70s and 80s, Trinidad and Tobago was called the “Saudi Arabia” of the Caribbean. But Guyana is going to hit 500,000 barrels of oil and even more by 2025.
With such production figures, this ethnically diverse nation is set to become the “Middle East” of the Caribbean.
But even with such a bedazzling picture of wealth and prosperity, Trinidadian Engineer, Richard Small, is urging the authorities here to begin meaningful dialogue on local content. According to Small, there is need for a serious conversation that will lead to locals being significantly employed and their services given priority in the oil industry.
Small made the comments yesterday at the launching of the Innov8 Business Expo which was held at the Marriott Hotel. There, Small delivered a 15-minute presentation on the oil industry from a technological perspective while incorporating important aspects of local content.
The Trinidadian said it is important for Guyana to take advantage of the glorious opportunity it has for maximizing local content. He noted that the nation would be wise in going this route as others have learnt the hard way that billions of dollars in oil revenue only last for a while.
In this regard, he pointed to Venezuela, which failed to maximize opportunities for transfer of skills and technology. By looking to maximize tax benefits, Small noted that such nations have nothing much to show for their oil money, except corruption and millions of dollars in expenditure.
Small asserted that Guyanese must seek to understand the technological aspect of the oil industry. He reminded that works are already taking place converting the oil tanker to a Floating Production Storage and Offloading vessel, called Liza Destiny.
Small said, “This is going to be a metal island at sea. As you know, you now have two metal islands at sea which are drilling operations going after more oil for the Guyanese people. Those things rent at US$250,000 a day, at least.
“So the first thing to grab out of that conversation is that in the oil and gas industry, time is money…Having said that, you need to understand the role of technology.”
The Trinidadian Engineer noted that the ICT or technological environment of a drill ship is vastly different to that which exists in an office.
Small said, “Because the technology is different on a drill ship, the Liza Destiny or FPSO being constructed in Singapore or wherever, should have Guyanese nationals there. They should be involved in the engineering, design and fabrication. They should be involved in all aspects of the construction.”
The engineer also noted that there are opportunities for investment by locals in the sector. He said that Guyanese entrepreneurs can begin to look at provision of drones, robotics, CCTV solutions, mobile computing, cyber security and safety systems for equipment and humans.
FINISHING TOUCHES
After several months of consultations, the Guyana’s Local Content Policy is still not completed. Dr Small noticed this shortcoming.
According to Minister of Natural Resources, Raphael Trotman, there are still some finishing touches, which need to be added.
Trotman said that several consultation sessions were held with stakeholders nationwide. He noted that the stakeholders included; the Georgetown Chamber of Commerce and Industry (GCCI); the Private Sector Commission (PSC); Chambers of Commerce in Essequibo, Berbice, and Linden; and the Guyana Manufacturing and Services Association (GMSA). From those meetings, the politician said that the Ministry of Natural Resources received valuable feedback on how to improve the Local Content framework.
Trotman said that at the end of 2017, the Ministry of Natural Resources received the latest iteration of world-renowned expert, Mr. Anthony Paul on the Local Content draft. He said that some in-house work is still to be done. He said that after that process, it will be sent back to the various Chambers for further comment with the intention of finalizing it within the first quarter of this year.
DRAFT POLICY
Guyana’s draft Local Content Policy has been criticized in recent months for lacking provisions, which would safeguard against exploitation by companies.
The draft speaks nothing of how to avoid procurement fraud, conflict of interest and favouritism, among other crucial areas.
Instead, the Local Content Policy framework seeks to address, the suite of opportunities that may arise and the approaches to be taken in selecting and developing opportunities related to enhancing the capabilities of Guyanese nationals and businesses.
The Policy articulates that this will be done through training, development and employment initiatives (Capacity Development), ensuring availability of ownership participation for qualified Guyanese equity interest (Ownership Value), supplier development provisions for goods and services by locals to support sector operations (Local Content); and well-tailored social contributions for greater impact and benefits (Societal Benefits).
It also describes what will be done to ensure that the activities in the petroleum sector are conducted in a manner that transparently secures the maximum benefit for the people of Guyana, while recognizing the limitations of the country and holding all actors accountable to the present and future generations of Guyanese who are the owners of the nation’s petroleum resources.
Additionally, the draft policy recognizes that the petroleum resources of Guyana belong to all its citizens, and represent an asset of significant intrinsic value, which once removed diminishes the wealth of the nation, unless there is transformation in value from resources below the ground to improve quality of life above it for current and future generations of Guyanese.
The draft says, “Guyana will approach the development of its petroleum resources, people and businesses in a pragmatic, transparent and accountable manner. This will be conditioned by existing circumstances and an analytical approach to understanding the resource, the activities it engenders and our input capabilities. We shall pursue strategic opportunities for local capacity development and participation that give us the maximum possible benefit now and in the future.”
The Policy also states that Guyanese will participate in a manner that gives preferred access and opportunities to improve and enhance the country’s capabilities so that it can become internationally competitive and in the end, the country will progressively provide a greater amount of future services.
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