Guyana’s new local content law is meant to strike a delicate balance for foreign and local involvement in Guyana’s nascent oil and gas sector and, according to President Dr. Irfaan Ali, the country should accumulate at least US$650 million (or GY$136 billion) from local content by the end of 2022.
The Guyanese Head of State, speaking at the opening of Suriname’s oil and gas summit on Monday, said that conservative estimates project that local businesses and Guyanese nationals will earn this sum by year-end.
Of that sum, some US$80 million (or GY $16.7 billion) alone will be earned through direct employment costs.
And these benefits and the government’s ability to monitor how Guyanese are benefitting from local content in the new sector is made possible through the new local law, Dr. Ali said.
“What local content legislation allows us to do is establish an infrastructure and institutional environment in which we can measure the impact in the local environment.
“All the investment in the sector, we are able to measure so people can understand what that impact is and corporations would also understand what role they have to play in building local capacity and involving local capacity in their operations,” the Head of State said.
The new Local Content law was enacted in December 2021, and demands oil-and-gas companies, their contractors and sub-contractors to hire/procure goods, services and employment from Guyanese companies and Guyanese nationals.
Essentially, it outlines the level of service and the number of goods local entities can provide currently. A percentage requirement for the procurement of these goods and services by the end of 2022 has been detailed, too.
And local companies, which are able to benefit from certain carved-out opportunities, must meet key guidelines that are assessed by the country’s local content secretariat.
As Suriname’s oil and gas sector now progresses, similar to the development Guyana has been experiencing, the ongoing oil and gas summit is also expected to focus on local content there.
But both President Ali and his Surinamese counterpart Chandrikapersad Santokhi highlighted that the countries must work together to ensure that the region is able to benefit.
The two countries are hoping to work together to develop their oil and gas resources and establish a wider energy corridor with northern Brazil. This is expected to ensure that the Caribbean region is energy secure.
