Since the discovery of oil, there has been an overwhelming desire from the citizenry and even international operators to ensure there is a policy or law in place that articulates how Guyanese can be part of the oil and gas supply chain.
But Attorney-at-Law, Nigel Hughes is cautioning citizens and even the authorities to “take things nice and slow” regarding local content.
Speaking at the Eusi Kwayana Emancipation Symposium which was held at Friendship Primary School, Hughes said that a rushed local content policy or legislation could leave the country paying millions of dollars to US oil operator, ExxonMobil.
Hughes said, “There is the argument that we should tie the company down to a percentage, that we should instruct oil companies to hire either 50 or let’s say 60 percent of Guyanese for their project. But what happens if we don’t have the qualified people to fill the positions? All that will happen is that the oil company will say, ‘Fine! We will hire 50 percent but this is now an expense. So, we will charge you for it in cost recovery.”
The Attorney-at-Law, who is also linked to more than 20 oil and gas related firms here, then sought to give an example of a country that is feeling the squeeze for harsh local content provisions.
Hughes said, “In Azerbaijan, they passed a law that said 60 percent of the people employed on the rig must be locals. But the locals were not qualified. So what the oil company did was, they employed the locals but paid them to stay home. They were not going to allow people who lacked the qualifications and experience onto their rig…This drove up cost recovery for Azerbaijan.”
That said, Hughes recommended that the Government pursues a gap analysis for the private sector and the public sector. He said that this is needed to ascertain where capacity is needed.