Nov 24, 2022 News
…Govt. must redouble efforts to help grow local capacity
Kaieteur News – Even as private sector bodies have stated on record the need for more areas in the oil and gas sector to be ring-fenced for Guyanese to benefit, the Minister of Natural Resources, Vickram Bharrat has cautioned that these groups must temper their expectations for greater demands.
The Opposition on the other hand is adamant that this approach by government is nothing short of a “tragedy”. Opposition Economist and Oil and Gas spokesperson Elson Low in a press conference on Tuesday told reporters that government should instead be channelling its efforts to help grow the local capacity, so as to ensure Guyanese benefit from the sector.
He explained, “If the Minister is framing it in that way then that is a true tragedy. There are many countries where you have Local Content Legislation but to say that Guyanese must temper their expectations as opposed to saying that the government will do everything in its power to ensure that Guyanese are able to fully benefit, to ensure that Guyanese are able to scale their businesses, ensure that Guyanese have the appropriate training to meet those requirements that is what a government should say, not to say that Guyanese should temper their expectations.”
Low went further to note that there is no point in enacting a Local Content Law and failing to empower Guyanese to truly tap its benefits. “We have mentioned before that as much as the country does need talent from other parts of the World, it is the duty of the government to ensure that Guyanese are given the capacity to eventually be able to fill every area that is available within the Local Content sphere, so for him to say that, I think it is truly tragic.”
This newspaper had reported that Guyana is gearing to review the Local Content Legislation, passed in December last year. At a forum hosted to consult with the private sector last week, the subject Minister explained, “We have to be honest with ourselves and accept our disadvantages and shortcomings and recognize what we need to strengthen. There is a capacity deficit in Guyana and we cannot run away from that. And no one is to be blamed for that because we are moving at such a speed that it is hard to keep up.”
Prior to that, it was reported that the law currently sets aside 40 areas of work which must see high levels of participation from Guyanese. Some of these works pertain to logistics, security, immigration support, transportation, customs brokerage and catering.
Bharrat said the private sector must be mindful not to seek demands to have a large number of services added to the law since the country is experiencing a capacity deficit. He appealed that their recommendations be realistic.
Bharrat said, “In order to truly achieve local content, I would remind the private sector that it can only be achieved with capacity development. We can quarrel whole day about what aspects of the ring-fenced categories of work must be increased but do we have the capacity to meet the targets effectively, efficiently and cost effectively?”
The Private Sector Commission (PSC) only recently called on the Local Content Secretariat (LCS) to expand the areas set aside for Guyanese to benefit from the oil and gas sector. “It is time that we expand those 40 categories. The capacity and skills of the Guyanese and their businesses are expanding,” the PSC President, Paul Cheong said at the opening of the Guyana Supplier Forum on November 8.
It must be noted that while the minister is on one hand cautioning the private sector to temper its demands for the upcoming legislative review, government on the other hand is also supporting and fuelling an unprecedented speed in development.
Since assuming office, it has not only supported ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL) with increased production and the Liza Destiny and Liza Unity vessels but it has also signed off on two more licences for projects in the Stabroek Block, namely Yellowtail and Payara.
Government is also supportive of Exxon and partners developing a fifth project. In its project summary that was submitted to the Environmental Protection Agency (EPA), Esso Exploration and Production Guyana Limited said the Uaru Project will be located in the eastern portion of the block, approximately 200 km from Georgetown and amid previous Stabroek Projects.
Current plans include drilling to produce oil from approximately 40-76 wells which costs millions of dollars. Production is expected to begin between the fourth quarter of 2026 and the second quarter of 2027, with an expected field life of at least 20 years.
Exxon has to put up a sign board across the Demerara Harbour Bridge to tell Guyanese what % of revenue we are getting from the Stabroek Block!
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