AT last week’s launch of the new Canada-Guyana Chamber of Commerce, President Irfaan Ali and the outgoing Canadian High Commissioner, Lilian Chatterjee, spoke at length about how Guyana can tackle one of the biggest emerging obstacles to the country’s newly found oil wealth: lack of a local technical capacity needed to win contracts in the industry.

“We will provide Canadian expertise—but in order to have true partnership, Canadians will rely on training a skilled workforce in Guyana. But let me be clear—that workforce does not exist in Guyana right now,” High Commissioner Chatterjee said. She urged Guyana “not to resist foreign investment, but use its judgement on who to trust,” as it continues to develop and grow its oil and gas sector and signs additional contracts.

This highlights the challenge companies face here: Many strides have been made in just a few short years for a country that had no previous experience with oil and gas, but Guyana’s industrial and technical capabilities still have a long way to go. That process of building up local abilities to meet the high standards of a complex industry is not one that can be rushed and must be balanced with investments and expansion in Guyana’s other major economic sectors.

President Ali echoed many of the same concerns in his own remarks, saying “The private sector needs to be more innovative and become a partner that is capable of managing the new economy.” High Commissioner Chatterjee went on to note that Canadian companies have reported that they do not have sufficiently educated or specialised labour resources available to sustain project growth, despite following through on promises to provide training and capacity building exercises.

While Guyana has made significant progress with a local content policy to frame expectations to provide first preference and fair and adequate opportunities, it must be careful to avoid overly prescriptive legislation that could stifle investment and actually hinder companies ill prepared to compete right now. A bad fit there could be harmful to companies, the country’s timely development, and could unintentionally put its workforce in jeopardy.

Developing the best combination of education and skills for such a technically complex industry on an appropriate timeline is a constant work in progress over the long-term. But continued development will only help the country’s local businesses become more integral to the industry.

There are currently over 700 local Guyanese companies working in the oil and gas industry, and that number is growing every day. The Centre for Local Business Development in Guyana is supporting these efforts and has set up a mentorship programme to help local companies obtain ISO international quality certificates. So far, over 20 companies have joined the programme and six are already certified. From business services, to training programmes for oil infrastructure crews, to construction, Guyana is building expertise in this sector and is providing the professional development pathways needed for the country to succeed.

One potential area where local companies could be involved to develop further expertise would be building a power plant to take advantage of natural gas found offshore. This has the opportunity to provide Guyana with cheaper, cleaner, and more reliable energy. According to reports, Exxon has agreed to support development of the gas pipeline. But that’s where the company’s involvement would likely end. Although it is one of the world’s largest oil and gas producing companies, Exxon is not a utility company and is not in the electricity generation business, which is a separate industry.

Through a public-private partnership, Guyanese companies could have the opportunity to work with the government to support building an onshore power plant that would connect to Exxon’s gas pipeline. As Guyana’s local expertise grows to include the power sector, this type of cross sector project could substantially build up Guyana’s industrial and technical capabilities.

Although the comments made by the Canadian High Commissioner that Guyanese companies need to step up ring true to some extent, it’s clear that many have already done so. And opportunities for more to join are only likely to grow. But it’s also clear that a process based on meritocracy cannot be rushed. Developing local content is a recognised competitive advantage.

Guyanese should be wary of any attempts to regulate technical capabilities into existence through questionable practices like mandatory joint ventures or ring fencing — which can become fertile ground for corruption and patronage. Equally important, Guyana must be cognizant of the induced resource movement effect from stringent and sometimes unrealistic local content targets, which have been implemented in other countries to the detriment of the growth of wider economic sectors.
Guyana is on the right track. But a steady and carefully calculated pathway forward is still the best way to keep up the progress in the country’s rapidly growing energy sector.