GOGEC applauds gov’t on tabling local content legislation
See full press release below:
The Guyana Oil and Gas Energy Chamber (GOGEC) welcomes the move by govt to swiftly legislate local content in order to maximize the benefits to Guyanese firms from the oil and gas sector. At the same time, GOGEC recognizes that any local content framework should not be too stringent which in turn would diminish the competitiveness of the industry.
It is important that a balance be achieved to ensure maximum local content while at the same time, remaining foreign investment-friendly.
The local content has to be realistic and practical to the extent that it will take years for Guyanese firms to build certain specialized capacity to serve the industry. These targets therefore should be as realistic as possible. On the other hand, where local capacity can be developed rapidly, maximum local content should be encouraged. The local content framework also encourages joint ventures which is important to build capacity through partnerships.
Previously, there were three draft local content policies of which the latest version was designed for the upstream sector – ignoring altogether that the true benefit for the locals is in the midstream sector or the wider value chain onshore. Therefore, the spirit of true and genuine local content was lacking.
When the current administration assumed office in August 2020, one of its first stakeholder engagements was with the wider private sector. In February of this year a local content panel was put together and began a series of stakeholder consultation exercise that resulted in the first draft local content policy, which widely reflected the views from those engagements. The policy was substantially overhauled to reflect a true and practical local content element – rather than the upstream sector which only the large oil majors can participate in that space.
Further, more recently this week before the bill was tabled, there was another round of consultations with a wide cross section of private sector stakeholders. To this end, GOGEC is pleased to see that many of the substantive issues and concerns raised during these consultative sessions, were reflected in the final output. For example, the bill speaks to a local content secretariat that will be responsible for monitoring and evaluation, etc., penalties, local content master plan, among others.
Overall, GOGEC commends the govt on this front where especially the govt appreciates the need to have that balance between local content and FDIs.