Oct 21, 2020 News
Kaieteur News – When looking at the sheer scale of its oil and gas discoveries, it is clear that Guyana has in its hands an enviable amount of wealth. But to ensure that resource benefits its citizenry – the true owners of this patrimony – the politicians in office have to get a few things right.
According to Chatham House Associate Fellow, Dr. Valerie Marcel, one of those things is an effective Local Content Policy that is backed by robust laws.
Such a policy serves to guide oil companies on how they must go about giving first preference to local businesses and how they are expected to train and hire citizens to be part of their operations.
Dr. Marcel cautioned that in creating such a document however, Guyana needs to think long term and keep its eyes fixed on outlining provisions that create value that would last for years to come and under economic different circumstances.
Expounding on this front, the expert said, “When you have a string of small or big discoveries, there is often a rush among university students to go into petroleum engineering or geophysics. But there are very few jobs required in that very specialized field. Also, companies will be willing to train some of them but it will be limited.”
Instead of training scores of Guyanese in those specialized areas, Dr. Marcel said the new oil producing state would be better served in conducting training for vocational skills which can be applied to other sectors of the economy.
Dr. Marcel said, “Welders and electricians, those kinds of vocational skills are very much in demand during the construction phase, if you will, of the oil projects.
The advantage with this is that if the oil sector is in decline, if there are too many jobs for the welders available, they can also be used in other parts of the economy. So you have that dual-use or that ability to deploy them to serve other sectors of the economy. That helps to guard against the dependence on the oil sector.”
The expert added, “If you are only training very specialized skills, or producing manufacturers for the petroleum sector, it then sort of gives you narrow options in terms of market. So I think that that’s something to consider.”
Further to this, the Chatham House Fellow said that Guyana can also consider creating a local content policy that takes into account, the global movement to cleaner sources of energy such as solar, hydro and wind.
In this regard, Dr. Marcel said, “The reality is that local content is seen through a different lens than two years ago. Now we’re seeing this really quickening pace in the energy transition and the future is uncertain for the oil sector. So you don’t wanna put too many eggs in one basket and you wanna think about that diversification of skills, supporting different sectors in the economy.”
Chatham House, a global champion for transparency and accountability which Dr. Marcel has been with for more than a decade, has on numerous occasions, advocated for emerging producers to ensure their local content policies provide the platform for creating long term value as opposed to simply hiring/training and using local services. In fact, the non-governmental organization based in London, has said that nations should also seek investments in state of the art institutions that would train generations to come not just for oil but for other sectors of the economy such as agriculture.
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