Mar 03, 2021 News
– Wants Guyanese to come up with “realistic” ones in absence of study
By Kiana Wilburg
Kaieteur News – Following independent research, Kaieteur News exposed on Sunday that the targets being proposed by the Natural Resources Ministry (NRM) in the draft Local Content Policy, were not informed by a gap analysis. Instead, most of the targets, including an incorrectly spelt category of work, were plagiarized from Ghana’s Local Content Regulations.
In a missive to the press, the Ministry sought to defend the plagiarism of targets that were crafted for an African country with 30.42 million people. The Ministry said it is essential, for one to be aware that the upstream oil and gas sector has a particular language that mirrors certain standardized characteristics and predefined roles that are common across the industry worldwide. It said, “While the sector is new to Guyana, the Ministry believes it wise to not re-invent the wheel and further complicate the description of these services. In the interest of clarity and hence, ensuring compliance and reduce loopholes in our local content regulations, job descriptions and services must be both pellucid and unambiguous. Therefore, to ensure the latter is attained, the language must be kept consistent.”
Even if this is the case, the Ministry still failed to say why it copied categories of work/services to be supplied to the oil industry in the exact order as listed in Ghana’s regulations, along the exact target numbers for start up, and even spelling errors. In Kaieteur News’ Sunday publication on this matter, it was exposed that Ghana’s Regulations contains 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.” (ROV stands for remotely operated vehicle. This equipment is a type of underwater robot and in some instances is accompanied by a diver.)
With respect to the suitability of some categories of work for Guyana, it should be noted that many have questioned the appropriateness of some areas that were copied from Ghana without thought for what Guyana’s industry vision or needs are. One case that was highlighted during the first round of discussions held at the Arthur Chung Convention Centre was the plagiarized category of steel plates. The draft document proposes that this be solely supplied by locals in 10 years. This was flagged by ExxonMobil Guyana’s Head, Alistair Routledge, who questioned how this would be possible when Guyana is not a producer of steel. During that very discussion, Vice President, Dr. Bharrat Jagdeo, said that the category and targets were “pulled from somewhere.”
Kaieteur News also found other areas of work that may not be suitable or appropriate for Guyana, including 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.
In its response, NRM said, “in the interest of time and the urgency in having a robust local content policy in place, which would then serve as the principal driver of the legislative framework, the Ministry has opted for the broad-based consultation process.” Further to this, the Ministry said, “The idea is for stakeholders to come up with both realistic and pragmatic targets. To date, this consultative process is ongoing…”
Interestingly, the Ministry is hopeful that Guyanese would be able to come up with realistic targets in the absence of a needs assessment. Such a study would provide critical data on the demands of the oil industry in a five-year period, the human resources that would be needed locally to fill the gap, and the cost to get this done.
While it acknowledges that the foregoing assessment is crucial in crafting the local content policy and that one was not done, the Ministry still claimed that, “The Government of Guyana through the Ministry of Natural Resources has worked with both international and local professionals in crafting the content of the policy and the establishment of realistic and realizable targets, over the different phases of development for the petroleum sector and sub-sector. These targets are set from the current trend of development in Guyana and projects from similar economies that have set a path of local content benefits over various periods of time.” No shred of evidence was provided to support this. Further, Dr. Jagdeo had said during the first round of consultations that the targets were pulled from somewhere.
Furthermore, Kaieteur News had exposed that in Guyana’s draft policy, the government is proposing 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. The Ministry of Natural Resources did not explain why the “international professionals” it consulted provided the same targets as those in Ghana’s Regulations for Guyana with a population of less than 800,000 people.
While the Natural Resources Ministry copied all of the categories of work from Ghana’s regulations and increased the target numbers in some areas, 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.
The Ministry is still to explain why it produced 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 independent assessments of experts as regards the realities on the ground.
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