As Guyana prepares for the economic and social transformation expected from our oil and gas (O&G) industry, the debate about local content requirements and the deeper roles of the State is taking on new hues, a new vehemence among the newly minted ‘experts’, and John Public. The subject has tremendous implications for every single sector in our economy.
It is really commendable that our local private sector is now meaningfully engaged in these debates. Perhaps the private sector has been spurred into action by the deepening interesting that our once O&G-rich neighbour is taking in Guyana’s budding industry. The debates swing to the left and then to the right, and Guyanese have a whole lot to say about our neighbour’s intention to participate in our oil industry, one way or another. John Public says that he has concerns about Trinidad’s ‘proposal’ for Guyana to buy into Petrotrin’s oil refinery that is about to be shuttered; and John Public is looking on at the long queue of Trinidadian entrepreneurs who plan to transfer their businesses to Guyana.
John Public says he is concerned that the Guyanese private sector waited for more than eight years, doing nothing to expand and diversify their businesses despite the many sensitization and awareness conferences, symposia, workshops, and visits by the real O&G experts from Labrador/Newfoundland in Canada, from the Netherlands and Norway, to name a few. These experts were coming to Guyana before 2011 to prepare Guyanese business owners for the opportunities that would open up once oil is found. By then it was a certainty that hydrocarbons existed in Guyana’s EEZ.
Foreign Business owners – all categories of business – started pouring in since 2014 from India, Pakistan, the Middle East, China, Canada, Jamaica and our neighbour T&T. They made the necessary connections with GO-Invest and the various Registries and bureaux, paving the way to start up non-national business ventures, some partnerships and some speculations.
John Public has a long memory, but he says he is willing to accommodate our neighbour, provided that they play fair and not try to shove us aside in our own country. Trinidad and Tobago once was one of Caricom’s most influential states until mismanagement of their oil revenue and the debilitating effects of the Resource Curse took hold, according to UWI Researcher Dr. Roger Hosein. Today, the country has already begun to institute austerity measures.
When Trinidad’s current political opposition party, the United National Congress (UNC) announced that T&T is lobbying for Guyana’s oil to be refined by Petrotrin, John Public said that he now understands why our neighbours have become so bullish about putting their mark on Guyana’s hydrocarbon industry.
What T&T is doing is the essence of job creation for your own people, said John Public with grudging respect, but John is concerned that Guyanese will lose out again if a certain road is taken. Just as how T&T’s immigration wasted no time in rounding up Guyanese living on their island as recently as three years ago, detaining them in jail-like conditions, and making them pay the airfare for their own deportation, is the same way they will most likely employ all Trinis to work in the Refinery, because, as they love to point out, Guyanese have no experience, no training.
The more than 100 year-old refinery at Pointe-à-Pierre near San Fernando has to be repaired, and aged equipment changed out for modern systems that can refine Guyana’s ‘sweet’, lighter crude oil. Guess whose peoples will be chosen for that rehabilitation project.
It was surprising to learn that on the eve of the plant’s closure, it is massively overstaffed and working way below optimum capacity, refining about 40,000 bpd from a max capacity of 140,000 bpd.
Even with this reality, the plant still has almost 3,000 workers including casuals in its employ who have little to do for eight hours daily. This situation did not begin yesterday.
So, tired of bailing Petrotrin out in circumstances very similar to our GuySuCo scenario, T&T’s government took the decision to close the plant to plug the dark hole that’s draining their economy. But former PM Kamla Persad-Bissessar has been strongly advocating for T&T to sign an agreement with Guyana to refine Guyana’s oil purely as a means of keeping Trinidadians employed.
There is something else worrying our local private sector. They all are patently aware that most of Caricom’s expertise in oil and gas resides in Trinidad. They reason that when the refinery closes, Trinidadian workers would head straight to Guyana. Their experience will again keep us out, i.e. until our people return home with appropriate certification to chalk up some experience.
So it is not unreasonable to expect the private sector to offer scholarships to young Guyanese for overseas studies in Petroleum/hydrocarbons; to fund oil-specific programmes and research at UG; to partner with Exxon and other explorers to design and get accredited an Oil and Gas polytechnic college; and to set up their own watchdog agencies in O&G Accounting and Legal requirements to partner with national agencies just to protect local industry.
Our Chamber of Commerce (GCCI) argues that local companies want official support in the form of protective legislation. They have asked Government to wait until we have passed all Local Content legislation before committing to any pending MOU’s. They want to be given first consideration, and for the local legislation to be in accordance with best global practices on competition and on WTO rules.
The GCCI believes that without these allowances for Guyanese businesses, foreign companies would not bother to establish joint ventures with them, or employ local skills, not if they aren’t mandated by law to do so. In addition, Knowledge and Technologies would not be transferred, and locals would not get the exposure and (re)training they need.
At the forefront of the fight to ensure that Guyana gets it right is the Guyana Oil and Gas Association. GOGA began their public interventions in 2016 and next on their Agenda is a Public ‘consultation’ in November, where the uncertainties expressed by the business sector, and the opportunities for career enhancement are sure to come up.
There is one particular subject that many would like to have discussed. It concerns the ramifications of foreign majority ownership in joint ventures; the locations of companies’ headquarters; and the majority nationality of employees.
Interesting times are ahead as we speed towards first oil in early 2020.
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