THE Local Content Act (LCA) has been hailed as a success by Sanjeev Datadin, an Attorney-at-Law and Government Member of Parliament (MP), who believes it is instrumental in attracting and benefiting Guyanese nationals in the oil and gas industry.
He made these remarks during a recent episode of the Energy Perspectives Podcast with Chief Executive Officer (CEO) of the Guyana Energy Conference and Supply Chain Expo, Kiana Wilburg.
While echoing his support for the LCA, Datadin said: “The legislation is intended to fuel the growth of the Guyana petroleum sector.”
Commenting on the ongoing debate surrounding the Production Sharing Agreement (PSA), he stated: “You got to remember that recovery is two sectors always and in Guyana a lot of focus is made on how much money goes to the government but there’s two sectors; there’s the public sector and there’s the private sector.”
Datadin further explained that cost recovery either goes to the government, in which the money is spent on public development projects or it goes directly to the private sector and that creates wealth for the people.
As it relates to the importance of the LCA as it relates to the protection of Guyanese companies, he noted: “People are always suspicious of change and those that are entrenched don’t really like the change because they like things to be [the way they] are. It has been said, and we know, that petroleum companies come with all of the subsidiaries… what that means is that when Exxon came to Guyana, Exxon had linkages for everything it needed.”
Because of this, the MP pointed out that Guyanese would not have been able to gain entry if it was not for the crafting of the LCA since ExxonMobil is a worldwide company with connections in all of its requirement areas.
“…Because of [the] legislation, Exxon has had to pivot, so they can’t simply bring all of the foreign companies. They’ve got to raise the bar locally, so that those companies can perform and provide the service…” the MP said.
As local companies partner with foreign companies, he noted that this is evidence of the LCA being a success.
He also listed the positives that are being reaped because of the requirement within the legislation that a percentage of the employment must be nationals.
“They [Guyanese nationals] are now sought after so that statutory requirements can be met, so I think undoubtedly the Local Content Act is a success,” Datadin boldly said.
While noting that it is not “rocket science,” he said that in the absence of local legislation, Guyanese companies would be shut out.
Further, he outlined several elements that ensure local companies can make a name for themselves within the oil and gas sector.
He mentioned that the legislation grants locals the right to protect themselves from foreign companies that might try to dominate them, as there are laws in place to prohibit this kind of oppression.
On December 31, 2021, the Government of Guyana passed the LCA 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.
The LCA 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.
