‘No small hustle’ – local content helping to correct imbalance from poor oil contract – Ali
By Kurt Campbell
Kurt@newsroom.gy
President Dr. Irfaan Ali has defended the depth of his government’s local content law, passed in the National Assembly in December 2021, but which continues to be criticised.
Dr. Ali, during an engagement last week, said through the new legislation, Guyanese companies have been able to achieve substantial growth and expansion in one year, which would have otherwise taken them 10 years to accomplish.
In fact, he said while the government is legally bound to honour the current oil contract which he has long regarded as poor, the Local Content Act is helping to “rebalance an imbalance situation created by the agreement.”
“It was this government that passed the Local Content Act to ensure the country and people derive increased benefits from the oil and gas sector.
“The Local Content Act has increased the pace at which local capacity is developing and local opportunities are growing,” he said.
Speaking directly to critics, Dr. Ali said members of his government “are not dumb” and noted that the critics have failed to go through the depth of the policy.
“It is the depth of the policy; it is not superficial.
Local content is the means through which we are ensuring greater retention and value-added from oil and gas… it is ensuring the benefits are not totally extrapolated by foreign firms.”
The Head of State remembered the many calls made to throw out the current oil contract and halt exploration and production but cautioned that it was not an option worth exploring by a government serious about the state of a country.
The President believes local content is transitioning Guyana to a more sophisticated economy and frowned on the fact that it is being caricatured as a small hustle.
“…And this annoys me. This must annoy all of you when people describe local content as a small hustle. It is an insult to all of you here.
“Guyana was expected to earn US$650 million in local content by the end of 2022; the law is meant to strike a delicate balance between foreign and local involvement in Guyana’s nascent oil and gas sector.”
With the local content law, a Guyanese national or Guyanese company, issued a certificate by the Local Content Secretariat, receives preferential treatment in the award of contracts by the oil companies and their subcontractors.
This certificate confirms that the Secretariat is satisfied that the holder of the certificate is a Guyanese national or Guyanese company. Those nationals and companies are included in a local content register.
Essentially, the law 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.
