Another US$34M IDB loan to help fix Petroleum Commission Bill, new Local Content Policy

While Guyana’s request for a US$34M loan from the Inter-American Development Bank (IDB) is still in the preparation stage, the financial institution has already made it clear that a portion of it would be used to help the country get its Petroleum Commission Bill and new Local Content Policy in order.
With respect to the Petroleum Commission Bill, the financial institution has noted that Guyana needs to make urgent reforms to the current draft so as to ensure that head of such a crucial body is empowered to act independently and is able to demand that stakeholders obey industry norms.

In relation to the new Local Content Policy being pursued by the People’s Progressive Party/ Civic administration, the IDB holds the view that a push towards local content strives to ensure, at the very least, that a company is hiring local labour and procuring local goods and services from the host country. Towards this end, the bank said it will help Guyana update its new local content policy to increase the participation of the local companies along the value chain of the oil and gas sector.

Last month, the government had disclosed that it had received the first report on recommendations for the policy from the Local Content Advisory Panel which was chaired by Shyam Nokta. Even though the document is yet to be released, Kaieteur News understands that it is expected to contain a review of all existing initiatives and policies where local content is concerned and guide the development of a new policy and legislation.

The local content policy currently in place was drafted under the former David Granger administration but was controversial because of a glaring absence of provisions to give Guyana more benefits. That document was finalized by ExxonMobil affiliate, Dr. Michael Warner. Warner is the UK consultant that APNU+AFC used to replace Trinidadian local content expert, Anthony Paul. Paul has been retained by the Irfaan Ali administration to assist with the revision of the policy and the installation of legislation.

The private sector has criticised the current policy as unfit for purpose, and has expressed that it did not heed the recommendations of the business service organizations. Also sharing these sentiments was Opposition Member of Parliament and shadow oil minister, David Patterson. The AFC Member has since challenged the government to set local content targets for oil companies in its policy.