THE Government is actively examining potential amendments to the Local Content Act (LCA) that could allow alternative pathways for companies to qualify as Guyanese-owned, Director of Local Content and attorney-at-law, Michael Munroe, has disclosed.
Appearing recently on the Energy Perspectives podcast, Munroe said policymakers are engaged in ongoing discussions about whether the current ownership threshold under the Act remains the most effective way to achieve its objectives, particularly as the petroleum sector continues to expand and mature.
Under the Local Content Act as it presently stands, a Guyanese-owned company is one in which Guyanese nationals hold at least 51 per cent beneficial ownership. Munroe indicated that this requirement is now among the provisions being critically assessed.
“So maybe there might be room for us to consider alternative pathways for companies to be considered a Guyanese company,” he said. “So maybe perhaps you could re-look at the issue of whether they necessarily have to have 51 per cent beneficial ownership? Could we relax that maybe to 25 per cent?”
Munroe explained that any potential relaxation of the equity requirement would not amount to a weakening of the Act’s core purpose. Instead, he suggested that reduced ownership thresholds could be balanced by firm obligations on companies to invest locally and contribute meaningfully to workforce development.
“And the company, as a trade-off for that relaxation in equity taking this business, commits a certain level of investment locally,” he said. “They commit to a certain work programme in terms of upskilling locals.”
According to Munroe, the central aim would remain unchanged. “So, we’re still achieving local content, but it’s just that we’re doing it in a different way,” he noted, adding that these discussions are part of active policy thinking.
He stressed that any reform must continue to reflect the foundational goals of the legislation.
“We still achieve the core objective of the Act, which is to promote local content, upskill our Guyanese, and ensure that they’re not just mere bystanders in our petroleum story,” Munroe said.
The Local Content Act was enacted to ensure Guyanese participation and benefit in the oil and gas sector, with an emphasis on ownership, employment, training and the use of local goods and services. Munroe’s comments suggest that regulators are increasingly focused on how best to balance legal thresholds with practical outcomes.
He acknowledged that while the ambitions of the Act are clear, implementation must take into account on-the-ground realities.
“We need to be very introspective and we need to be really truthful with the reality on the ground is that while we want to achieve certain things, we need to be nimble enough to navigate these nuances within the local space,” he said.
One of the challenges confronting the local content regime, Munroe admitted, is the persistent issue of fronting, where companies appear Guyanese-owned on paper but do not genuinely reflect local control or benefit.
“Fronting is a real issue that has arrested the Local Content Secretariat,” he said, referring to the scrutiny already being applied by regulators.
“We have a situation where you would find Guyanese ostensibly presenting themselves as the owners of companies when, in fact, they don’t own the companies,” Monroe said. He described this practice as running “counter to the legislative intent and spirit of the Local Content Act.”
Monroe said his legal background has been critical in identifying and addressing these loopholes.
Munroe added that authorities have been actively responding to such cases. “And we’ve been doing a good job in terms of trying to deal with it on a more ad hoc iterative basis.”
However, he suggested that future reforms may require a more structured approach. “But I think in going forward, we perhaps need a more structural approach. And that can come by looking at the legal avenues through which a company can be considered local,” Munroe said, trailing off as he signalled that further policy development is anticipated.
He indicated that any proposed changes to the Act would be carefully designed to preserve its intent while improving its effectiveness. The emphasis, he said, remains on ensuring Guyanese are meaningfully involved in the petroleum sector through ownership, investment and skills development, even if the mechanisms for achieving that involvement evolve.
While no formal amendments have yet been announced, Munroe disclosed that a policy dossier is already in draft form and amendments are expected to gain traction in 2026.
He said stakeholder consultations will follow once policymakers give the green light.