GUYANA’s Attorney General and Minister of Legal Affairs Anil Nandlall announced last week that the country would update its local content laws to reflect the learnings and recommendations from stakeholders in the growing oil and gas industry. This is welcome news for Guyanese individuals and companies who envision providing their goods and services to the sector.

On December 31, 2021, the Government of Guyana passed the Local Content Act 2021. Subsequently, it published several related guidelines that were designed to maximise the participation of Guyanese companies wherever they have the skills and capacity to get involved, beginning with services such as office space rental, janitorial services, laundry and catering services, pest control services, insurance services, supply of food and accounting services and extending through long-term involvement in highly skilled subsectors like subsea installation, geophysical analysis and engineering.

In laying out the rationale for the update, Attorney General Nandlall said, “We have now had two years of the Act being in force…the first piece of legislation of its type in the entire English-speaking Caribbean. We said that it would be subject to review as we gain more experience in the sector and we will also supplement the law with regulations made by the Minister of Natural Resources.”

The Local Content Act was designed with the overarching goal that Guyana’s oil and gas industry can support an economy where small and medium-sized businesses can grow, thrive, and benefit from the country’s burgeoning oil and gas industry. The laws aim to ensure that companies operating in the country hire a certain percentage of local workers and use a certain percentage of local goods and services. These percentages are set to steadily increase as local workers and companies gain capacity and knowledge until Guyanese provide many services and fill most of the industry’s jobs.

Guyana saw a rapid expansion of training opportunities and certification programmes for local companies early on through the industry-funded Centre for Local Business Development (CLBD). This initiative has received praise regionally and locally. The CLBD was operational in Guyana before the first oil, helping companies align their operations with the services that would be needed in Guyana’s oil and gas sector. One prominent company that has benefited from the CLBD’s expertise, Guyana Shore Base Inc., is already expanding operations and seeking local vendors that satisfy the forty sectors outlined in the original local content law.

The update to the local content law will likely include new provisions that reflect the lessons learned since its enactment, the progress made in many areas and the remaining challenges. Laws like this are generally reevaluated regularly to ensure they correctly reflect the realities on the ground. Attorney General Nandlall has made it clear that the country has matured significantly, and modernising the workforce will be imperative to see the industry and country continue to advance.

“I think after we have acquired under our belt, two years of experience as an oil and gas producer, operator, and exporter, and I believe now…we are at a particular vantage point that we can now reveal our experience and start to work on modernising or making adjustments to the local content law and bringing in additional regulations that will strengthen the legislation to enable the government to achieve the core objective of the legislation, which is to protect Guyanese and Guyanese company in the oil and gas sector,” the Attorney General said.

With this new turning point for Guyana and the industry, the country will hopefully see even more local companies providing logistics and manpower services for increasingly high-skilled industry segments. 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 continue to play a central role, which is why such new provisions in the local content law will be integral to developing a capable workforce.

Guyana has already avoided some of the pitfalls of other countries with emerging oil and gas sectors because it has committed to putting Guyanese first through consistent investment in training, workforce development programmes, infrastructure development and other sectors that will support the local economy. Guyana has so far heeded good advice, and an updated local content law will significantly benefit Guyana’s economy for years to come as it transitions into being a global player in the oil and gas industry.