By Kiana Wilburg
President of the Georgetown Chamber of Commerce and Industry (GCCI), Nicholas Deygoo-Boyer, wants Guyana to be armed with a robust Local Content Policy that allows for partnerships between local and foreign suppliers along with requiring overseas based subcontractors to have registered offices here.
Deygoo-Boyer made these comments on a recent panel discussion that focused on local content. He was joined by Local Content Expert, Anthony Paul and Ramps Logistics Chief Operating Officer (COO), Shaun Rampersad.
On the Kaieteur Radio programme which aired on Thursday last, the GCCI President said that a few months ago, he would not have been a proponent for mandating partnerships between local and foreign suppliers. This was based on his belief that the free market must be allowed to work without interference.
But after listening to further commentary on this issue, assessing the three drafts for Guyana’s Local Content Policy, as well as examining policies around the world, he strongly believes that partnerships have to be considered as a significant factor if the nation is to be successful and retain considerable value from its oil wealth.
Deygoo-Boyer said, “…In Ghana, they mandate that there be partnerships. (But) we are in a bit of a weird situation because our trade laws and obligations under Caricom would put us in a peculiar position to mandate partnerships. But we should strongly encourage it…”
The GCCI President also highlighted that in Ghana’s Local Content Policy, companies are required to have registered offices. It is one of the mechanisms that is used to ensure more taxes are retained by the State which would have otherwise been avoided if the companies are not required to do so. The businessman said he strongly believes that Guyana’s policy should carry such a provision.
Adding to Deygoo-Boyer’s perspective was the COO of Ramps Logistics, which is one of the subcontractors for ExxonMobil and Tullow Oil. Rampersad categorically stated that partnerships are necessary given the dearth of technical skills and services here. The COO said too that it is one of the ways in which locals can overcome barriers to entry into the industry.
The Trinidadian businessman said, “We need the partnerships to bring in knowledge and existing product lines. Also, with the companies that have the knowhow and extensive contacts within the industry, it would help to open some doors for Guyanese businesses.”
Kaieteur News had exposed a few days ago that Local Content Expert, Anthony Paul had submitted in 2018, the second draft of Guyana’s Local Content Policy which not only mandated that foreign suppliers have registered offices here, but that there be partnerships with local firms too.
As a consequence of the government bypassing Paul, and using a British Consultant, Dr. Michael Warner for the completion of the policy, those provisions were removed. This publication had also exposed that Dr. Warner never wrote a policy before for any nation. He also has ties to ExxonMobil.
On the panel discussion last week, Paul spoke extensively about the importance of partnerships, while noting that it is a win-win situation for Guyana and the foreign companies if this occurs.
Paul said, “There are two reasons why it was recommended for Guyana, because there are benefits to both parties. Oil companies always want to maximize their profits, and locals providing goods and services help in that agenda, because if they are using someone on the ground they can eliminate some of the airfare costs to do that…”
The Local Content Expert added, “Now having said that, if the locals are not able to do the job, then how do you help them to do it? Partnerships! It is the same way you ride a bicycle. Someone was there to help you…someone who knows or has experience in the area and they are working alongside you. That is the best way to learn practical things.”
Further to this, the Trinidadian stressed that partnerships allow locals the opportunity to have a deeper understanding of different aspects of the oil and gas industry.
Paul also alluded to the billions of dollars Guyana is losing when there are no partnerships. In this regard, the Energy and Strategy Advisor noted that given Guyana’s model, for every barrel of oil sold, 75 percent of that money goes to cover costs incurred for hiring subcontractors for the development of the oil projects.
“Now imagine if you were able to retain 10 percent of that 75, that would be significant. And you can retain that through partnerships between the locals and the foreign companies, that is why it is so important,” added Paul.
He further stated that it is due to Ghana’s deep understanding and appreciation of the value that can be retained from partnerships, that they have provisions in their Local Content Policy, which makes this mandatory.
“At the end of the day, the question before Guyana, to what extent does it want to retain value from the oil industry?”
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