Stable rules needed to facilitate large-scale investments
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A Guyanese participating in activities within the local oil and gas sector
A Guyanese participating in activities within the local oil and gas sector

–says ExxonMobil President

AS Guyana inches closer to realising its potential as a global powerhouse, the country will need to institute stable rules that facilitate large-scale investments, President of ExxonMobil Guyana, Alistair Routledge, has said.
At a recent gala hosted by the Georgetown Chamber of Commerce and Industry (GCCI), Routledge said that the role of the government is critical, and that a dynamic private sector requires an enabling regulatory and fiscal environment.

His comments come even as the government prepares to defend two critical pieces of legislation in the National Assembly today: the landmark Local Content Policy and the 2021 Natural Resources Fund (NRF) Bill.

While the proposed NRF law seeks to ensure Guyana’s oil revenues are spent in a transparent and accountable manner, and only on developmental projects, the landmark Local Content Bill looks to secure optimum employment and business opportunities for Guyanese, within the burgeoning oil and gas sector.

In an interview aired on the National Communications Network (NCN) on Tuesday, Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh, emphasised the importance of both the NRF and Local Content legislation.

He expressed hope that heading into the House today, both Bills would be supported by the parliamentary opposition.

“I will retain that hope until the very moment that the vote is taken, even if their track record does not suggest that they have been a party interested in development and improving the wellbeing of people,” Dr. Singh said.

Meanwhile, ExxonMobil’s Routledge has commended the government for the work it has done within the past 16 months to improve the ease of doing business, reduce bureaucracy, and improve access to finance.

He went further to highlight the critical role of education and training of Guyanese, as the government pushes ahead to implement the Local Content Legislation.

“The private sector is dependent on the capabilities of the workforce. While we, the private sector, must all continue to invest in our employees, we rely on the education institutions to develop the foundational skills, both professional and vocational,” Routledge said.

He continued: “People are our most valuable resource and Guyana needs to invest in its people through education and training.”

As it is, the Local Content Bill outlines 40 sub-sectors within which oil companies are legally required to hire a percentage of Guyanese employees or procure a specific quantity of goods and services from Guyanese-owned businesses.

For instance, once the Bill is passed in the National Assembly and assented to by President Dr. Irfaan Ali, it would demand that oil companies procure 100 per cent of their ground transportation needs from Guyanese entities, at least by 2022.

The same percentage applies to the provision of immigration support services, customs brokerage services, and visa and work permit services. Similarly, 90 per cent of services relating to the rental of office spaces, the provision of catering services, accommodation services, laundry and janitorial services, and legal services must be procured from local entities.

The minimum local content requirements contained in the legislation relate to engineering and machining, which secures five per cent of opportunities for Guyanese workers in that field, followed by metrology and dredging services at 10 per cent and aviation and borehole testing services at 20 per cent.

However, once more and more Guyanese are trained in the latter-mentioned areas, the legislation could be amended to ensure that an increased number of Guyanese are guaranteed increased employment opportunities.

This assurance was given by Vice-President Dr. Bharrat Jagdeo, during his recent address to members of the Private Sector Commission (PSC).

At a breakfast ceremony hosted at State House last week, the former President said that over the next year, the People’s Progressive Party/Civic government will be working extensively with the business community to build and strengthen the capacity of the local workforce.

“There would be a massive training programme that… will radically change the environment for our local people,” Jagdeo said.

Additionally, the proposed legislation which was recently tabled by Minister Singh during the 32nd Sitting of the Twelfth Parliament, also contains specific penalties for foreign companies that fail to adhere to tenets of local content.

More specifically, it proposes a penalty of G$50 million for companies that fail to outsource most of their services to entities owned and run by Guyanese.

Routledge has since pledged ExxonMobil’s support to drive growth in local content. It was only recently highlighted that local participation in ExxonMobil’s onshore and offshore operations increased by 1,000 persons this year, taking the total number of people serving the company’s activities to 3,270.

The oil giant has said that in addition to that, ExxonMobil Guyana and its prime contractors have also spent more than US$540 million with over 800 unique Guyanese vendors. The company noted that the launch of the $20 billion Greater Guyana Initiative in February 2021 was another tangible expression of its commitment to bringing value to lives of Guyanese.

This initiative is a 10-year pledge by the Stabroek Block co-venturers to support capacity building. Work has been ongoing with key Technical Vocational Education and Training (TVET) institutions and the University of Guyana, while several new projects have been initiated and will be announced in the coming weeks.

“We recognise our role in providing sufficient flow of opportunities in order that local companies can recoup their investments. We need to work collaboratively to optimise investments, remove barriers and build capacity,” Routledge noted.

The outcome of the Local Content Bill could possibly see ExxonMobil and its partners having to increase the number of Guyanese within its employ. Today, all eyes and ears will be on the arguments presented in the National Assembly, whether in favour of or perhaps against the important piece of legislation.

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