THE discovery of oil deposits in any country for the first time always comes with unexpected suddenness, and the subsequent development of an oil industry comes with similar speed.  All Third World countries that discover oil reserves are inevitably caught in a syndrome of unpreparedness, and Guyana was no different.  Many countries continue to remain in a state of dazed unpreparedness for decades, during which time foreign companies providing goods and services ancillary to the oil industry set themselves up for reaping a bonanza, which the entrepreneurs of the host country could have shared if they had understood more clearly what was happening and were given a bit more time for preparation to enter the market.  The reason why the oil industries and the ancillary companies which serve them have the mobility of being able to set themselves so quickly in any part of the world, is simply that oil-prospecting companies and their ancillary companies are comparatively few and are already operative in some other part of the world.  Local or smaller businesses could never have this advantage.

In the first few years after discovering oil, Guyana was indeed in a state of dazed unpreparedness, and Vice-President Dr Bharat Jagdeo summed up the situation in his remark that under the previous government, foreign companies were able to take over almost every sector.  Fortunately for Guyana, there are two or three persons in government who are able, experienced and knowledgeable and have a fairly deep insight into the workings of the international oil industry.  Therefore, it was no surprise when Vice- President Jagdeo declared on behalf of the government that they were formulating a Local Content Policy which would soon be manifested in legislation.

In September last year, as soon as the new government acceded to office, an advisory panel consisting of Dr Shyam Nokta, Carl Greenidge, Anthony Paul, Kevin Ramnarine, Carville Duncan and Floyd Haynes was appointed and tasked with reviewing existing initiatives and policies about local content in the petroleum sector and guide the development of Guyana’s Local Content policy and legislation.  The work of the advisory panel would be supplemented with broad-based consultation with all relevant stakeholders and segments of civil society.  The ministry cautiously summed up the process, declaring: “Having realistic and pragmatic targets in place is crucial before any action is placed towards Guyana’s legislative framework.  Essentially, these targets will serve as a schedule of local content legislation”.

Vice-President Jagdeo was more detailed.  He pointed out that the policy and the legislation which enshrines it provide more opportunities for the growth and development of local companies.  “There are some sectors which we are putting into the law that could only have Guyanese businesses competing against each other . . . areas such as landscaping, logistics, transportation, food supplies, cleaning services and rentals will be reserved for Guyanese investors and players. . . Guyanese businesses will also benefit from a guaranteed percentage of operation in all other sectors”.

In addition to generating greater wealth and employment, the Local Content Policy will help to further Guyana’s economic transformation and stimulate partnerships between local and international companies, encouraging major investments and facilitating knowledge transfer.

Guyana remains ahead of several other oil and gas producing countries in its serious development of a Local Content Policy.  Several of them have no such policy yet, and it took decades for others to establish a well-balanced regime of such policies.  Trinidad and Tobago, for example, took nearly a century to create the comprehensive plan they have and Suriname. However, they have had an oil and gas industry for several decades, are only now beginning to craft a policy.  Guyana cannot indulge in self-congratulation, but must keep fully focused on effectuating the policy.

The Guyanese entrepreneurial community needs to be more proactive in seeking out and taking advantage of the many lucratively advantageous openings as the oil industry develops.