Feb 28, 2021 News
– Went against advice of local content panel
– Did no independent gap analysis
– Some copied measures unsuitable for Guyana
By Kiana Wilburg
Kaieteur News – Research conducted by Kaieteur News has found that the targets contained in the draft local content policy were not based on data gathered from an independent gap analysis. The sliding scale targets used by the Natural Resources Ministry were plagiarized in many parts from Ghana’s regulations. The plagiarism was so extensive that even a mistake in Ghana’s regulations was copied.
According to Guyana’s draft policy, the government is proposing that over a period of three to 10 years, oil companies should increase their use of Guyanese in various aspects of their petroleum operations. Specifically, the draft document notes that in the initial years, Front End Engineering Design (FEED) for onshore, offshore, Liquefied Natural gas facility, and detailed engineering gas gather facilities should see 20 percent, 10 percent, 10 percent, and 20 percent use of Guyanese respectively. Ghana’s regulations have the exact words and numbers.
With respect to the supply of pipelines, Guyana’s draft document notes that there should be a 10 percent usage of locals at startup, 40 percent in three years, 55 percent in five years, 75 percent in seven years, and 100 percent in 10 years. With the exception of the proposed requirements in the areas of three and seven years, (the only new features in terms of columns added to Guyana’s draft policy), Ghana’s regulations makes the exact demands. It leaves one to wonder whether Guyana expects to have a pipe mill in 10 years, making oilfield pipelines.
Furthermore, Ghana’s Regulations contain a mistake under the category Marine Operations and Logistics Services. The document says that Ghanaians should be able to supply “Driving” or ROV or submersible operations. Instead of “Driving” it is supposed to be “Diving.” Even this was copied and placed into the draft policy. (ROV stands for remotely operated vehicle. This equipment is a type of underwater robot.)
Additionally, some of the areas plagiarized from Ghana are unsuitable for Guyana as it is expected to be achieved over a 10-year period with high local content levels. One area that was already flagged in this regard during the first round of consultations is having locals supply 100 percent of the steel pipes, plates, flat sheets, and ropes needed in the sector in 10 years’ time. Other unsuitable areas with high local content targets that are plagiarized and being proposed include Logging while drilling (LWD), Production or drilling service, 3D Seismic data acquisition services, Well overhauling or stimulation services, Well crisis management services, and extended well test or early production Services including provision of floating or jack up production unit.
Also listed are services regarding the installation of subsea packages, reservoir services, mooring system services, hoop-up and commissioning of marine installation services, provision of floating storage units, and supply of Glass reinforced epoxy (GRE) pipe.
While the Natural Resources Ministry copied all of the categories of work from Ghana’s regulations and increased some of the targets, it is critical to note that these specified targets were not part of the recommendations of the Local Content Panel. That body was appointed in August 2020 by President, Irfaan Ali. The panel included Guyana’s Advisor on Borders, Carl Greenidge; Trinidadian Expert, Anthony Paul; Businessman and Chairman of the panel, Shyam Nokta; Certified Fraud Examiner, Floyd Haynes; former Chairman of the Public Service Commission (PSC), Carvil Duncan; and TT’s former Energy Minister, Kevin Ramnarine.
In the 35 page report of the panel, no specific targets were provided since it had no data to work with from a gap analysis. The panel’s report simply acknowledges that targets for employment and certain levels of procurement would be in the nation’s interest.
It is unclear why the Natural Resources Ministry would produce a draft policy that is not in keeping with the recommendations of the President’s Advisory Panel. Equally troubling is the fact that its targets are not informed by the realities on the ground.
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