AS Guyana’s oil-and-gas sector continues to expand, developments such as new shore bases and the relocation of companies from historic oil producers have created both opportunities today, and the potential for transformational economic benefits in the future.
Steady growth in the oil-and-gas sector is helping a rising number of local companies participate in the industrialisation of Guyana. There is a growing need for innovative and ambitious local firms across many sectors of the Guyanese economy.
But building the capacity internally to handle the new and growing needs of the oil-and-gas industry is still ongoing. This is not just a matter of technical or specialised skills, but also scale. Many local companies simply do not yet have experience providing goods and services at the scale and consistency demanded by international companies, or may simply not have the resources to rapidly expand their capacity.
Joint ventures and multi-company partnerships can be some of the most effective ways for companies to scale their operations, and build capacity to meet the needs of the industry today. For example, Guyanese caterers have discussed establishing a catering consortium to serve the needs of the growing number of workers on drill ships and offshore platforms, a figure that will increase exponentially if the expected ten FPSOs are put into production. Recently, Minister of Natural Resources, Vickram Bharrat committed to helping identify a team of legal counsellors, accountants and consultants to support the creation of this caterer consortium.
Minister Bharrat made it clear that the implications of joining this consortium would benefit Guyanese businesses, and have positive results for local content, noting: “[You] can own as an owner or a supplier; be a member of this consortium or be a part of a preferential list that will supply goods and services offshore. Either way, you, as Guyanese businesses, get to tap into this market, and earn massive revenue.”
Notably, this development is as a direct result of Guyana’s push to give local operators preferential market access, allowing Guyanese companies to partake in the procurement of goods and services for oil-and-gas operations. This Local Content Act and the now operational Local Content Secretariat require preferential treatment for local companies, and mandates that percentages of Guyanese labour, goods and services increase each year. It also encourages capacity development of companies and the workforce.
One of the largest “Tier I” contractors operating in Guyana, SBM Offshore, recently received its Letter of Approval for its Local Content Master Plan. This development signifies the seriousness the government is taking in its approach to ensuring local businesses can seize opportunities in the oil-and-gas sector. Additionally, this promotes the engaging of more local suppliers of goods and services, while expanding training and capacity building programmes through SBM Offshore.
In the latest episode of a webinar series from the diaspora group, the Guyana Business Journal, Professor Leyland Lucas, Dean of the School of Entrepreneurship and Business Innovation at the University of Guyana, highlighted that one of the “critical things for the effective local content policy to really take shape is skills development.”
Professor Lucas also pointed to the necessity of skills development to round out Guyana’s local content policy, focusing on the importance of “how quickly we can ramp up those skills in order to take advantage of the advanced components of local content. It is important for us to recognise that that skills vacuum is not going to be fixed overnight.”
Progress has been made, but to maximise Guyana’s ability to capture the most value from its resources and move Guyanese into more technical and managerial roles, effective training and worker development programmes must play a central role.
The industry-funded Centre for Local Business Development (CLBD) has been a central plank of the government’s strategy to grow local capacity, and provide guidance for companies that want to get involved. The direct engagement the CLBD has with local businesses has helped home-grown companies like Puran Brothers, a Guyanese- owned solid waste collection and disposal company, to provide a wide range of services to the oil-and-gas sector, including waste haulage and trucking services. The company took advantage of training opportunities and certification programmes through the Centre.
Guyana’s energy sector continues to grow, and as the country settles into a competitive role as a major oil producer, it is imperative that local businesses have the right resources available to them to participate as much as possible. It is evident that progress has been made, but it is still more important than ever that Guyana continues to foster development, and explore additional ways to encourage local innovation.