Law needed to force companies to use Guyanese in oil industry

By Neil Marks

Guyana needs to enact legislation that would guarantee the provision of goods and services by local companies to the oil and gas industry, Kevin Ramnarine, a Strategic Energy Adviser and former Energy Minister of Trinidad and Tobago has said.

“The sooner you get there it would be better. You have to have the power of law to compel the companies to use local goods and services,” Ramnarine said at an event organised by the Georgetown Chamber of Commerce and Industry (GCCI) Tuesday.

He added: “If you leave it up to the good intentions of the multinationals, you probably are not going to get the impact you want.

“You want as much as possible the supply chain for this industry to come from Guyana; not everything. Nobody here can supply drillship…but there are other things you can supply.”

Ramnarine reasoned that in the formative years of the industry in Guyana it might be difficult to get everything that is needed locally, and that has to be taken into consideration.

But he recommended that there be a so-called Local Content Law, and Local Content requirements be stated specifically in the production sharing contract with the companies.

He noted that the case of Trinidad and Tobago, in the 1960s and the 1970s, what Trinidadians supplied to the oil and gas industry were just rented cars, rented homes, and food. But that has now changed.

“A lot of the mudlogging, cementing and drilling are done by Trinidadian companies. But that takes time.

“It took almost a generation for that skill-set to really emerge in Trinidad to the point now where we export those skills set around the world,” Ramnarine stated.

Ramnarine warned, however, that a Local Content Law could be challenged for violating rules of the World Trade Organisation, with Guyana being accused of creating a non-tariff barrier.

He also pointed to the fact that at times, defining what Local Content is can be difficult.

Speaking at the same event Tuesday at Duke Lodge in Kingston, Georgetown, Ralph Ramkarran, former Speaker of the National Assembly, said past practices could help develop a clear picture of what Local Content in the oil and gas industry could mean.

In decades past, Ramkarran said any ship that came to Guyana or had business to do in Guyana had to have a local number of stevedores employed, otherwise, they wouldn’t get their goods offloaded or unloaded at the wharves.

But that policy was somehow lost and nobody bothered about it and as a result, the stevedore industry died, with many giving up work in the shipping industry to take up other jobs here or migrating to work in the industry elsewhere.

“There are many organisations like GUYOIL, for example, which hire ships that bring oil to Guyana that have only Filipino seamen. Good luck to the Filipinos!

“But what about when you hire ships, you ask them to put a certain number of Guyanese stevedores, otherwise we will go and search for other vessels – other ship owners – who are willing to do that. None of that was ever tried,” he stated.

“That is what Local Content means.”

Ramkarran agreed that there needs to be legislation dealing with Local Content.

“Unless you put a law in, even your friends are unwilling to help you with Local Content.”

Deodat Indar, President of the GCCI said that Guyanese would not get jobs, or their goods and services would not be used by the stroke of a magic wand. He said that Guyanese businesses must develop to be able to meet demands.

“The oil and gas industry will be a consumer. What it consumes Guyana should be able to provide, be it goods or services.

“What we can do now, let us do and as we grow as a country we can be able to migrate into supplying them. But we cannot be asleep all the time and expect things to get done,” he stated.

Indar added that Guyanese need to be on track with developments in the oil and gas sector.

“We need to understand what is happening. We need to be oil conscious all the time.”