First preference in oil and gas sector should always go to Guyanese – VP Jagdeo

When one hears the term local content, what should immediately come to mind is a situation whereby locals (individuals and companies) are given first preference to supply goods and services to Guyana’s growing oil and gas sector.

While this is so, companies like ExxonMobil have not always looked to locals even for the supply of simple goods like bottled water.
However, the days of oil companies outsourcing supplies that can be found right here in Guyana are over, as according to Guyana’s Vice President, Dr. Bharrat Jagdeo, government will not be tolerating this occurrence as first preference should always go to Guyanese.
And with Guyana’s local content legislation coming on stream by 2021, a huge margin of preference will be created for Guyanese living home and abroad.

“We have a growing, a burgeoning private sector with enormous and unlimited opportunities and the first preference should go to our people who live here in Guyana and who live abroad. They have to look at setting up business here, setting up services, coming down now and do joint ventures,” the VP outlined during a Globespan interview.
According to Jagdeo, Guyana is attempting to shift the oil and gas services industry locally so that “we would not have to rely on other countries like Trinidad and Tobago or the United States to provide logistical services Guyana is capable of providing.”

He explained, “If we have the support services that is a huge opportunity for Guyanese professionals, investors from Guyana, investors from abroad, a whole range of people. And they will have under our local content law to be passed next year, a huge margin of preference. So that is where we are trying to open up opportunities for our people, in real estate, in a whole range of stuff because we want our people to come back, they should have first preference.”

Jagdgeo noted that while Guyana may not be able to supply everything, the other aspect of local content kicks in, which is capacity building. He added that government is looking to get Guyanese more involved in the oil industry. This will also be bolstered by strong legislation which directs companies to recruit Guyanese once the skills are here and once they spend a guaranteed part of their total expenditure every year here in Guyana.
“…So we are not going to tolerate water coming from California again for the ExxonMobil staff. We have good enough bottled water for people to drink and they should buy that here. So if they do that, we would have to say that this can’t be funded out of cost oil. We can’t have the Guyanese guy making $75,000 per month and the foreigner making $2.5 million for comparable jobs. We can’t have you bringing Hurst taxi service here in Guyana when the company can easily rent taxis from our people. And also rent apartments from them,” the Vice President lamented.

He pointed out that in some countries like Trinidad, strict provisions are in place to bar oil companies from utilizing foreign services that can be found right in the country.
Like Trinidad, Suriname too has provisions in place to ensure that their locals get a fair piece of the oil wealth.
This paper had reported that the Dutch speaking nation’s Petroleum Law explicitly mandates that contractors in the oil and gas industry must use local goods and services produced and/or available in Suriname, over that of foreign goods and services. It noted too that the only instance where contractors can import those products is if the local conditions are “less than favourable”.

“How do the locals make money if we don’t do this?” Jagdeo asked. “We can’t go out and pump the oil, we can’t build the FPSO at this stage but at least we can do those things. Build nice apartments to rent, we can supply a whole range of goods and services, food, etc., to the companies and that’s where a significant part of the flow should come to our people.”
“We have made this clear and have said this to ExxonMobil; this has to be crucial, Guyanese must benefit. Our people must prosper and they must share a piece of the oil wealth,” the VP added.