A powerful Local Content policy is urgently needed to get ExxonMobil to help Guyanese businesses participate in oil and gas opportunities

Dear Editor,

Recently, I attended the Liza Phase 1 Supplier Development Forum 2018 organised by the Centre for Local Business Development and ExxonMobil (Guyana) to find out how Guyanese businesses could get a piece of the pie in our nation’s oil and gas sector.

It was quite educational for the local business community, and by extension all Guyanese, to learn about the intricacies, challenges and opportunities related to the industry. ExxonMobil and its prime contractors appear to be genuinely interested in Guyana’s development and it is good that they invested in educating the public about the complexities and potential benefits of oil production.

I was impressed by the sophistication of the technology involved in the extraction of oil from both beneath the sea and from the land. I saw a cylindrical object that penetrates the bowels of the earth/sea to assess permeability and porosity of the rock. It was like looking at science fiction. I realised immediately that Guyana is only equipped to play a small part in this.

This raises a burning issue. While the oil company might want to maximize local content, the technological complexity of the industry plus the harsh criteria they have put in place for local businesses to qualify as suppliers will exclude most of them from taking opportunities and getting benefits from the sector.

Make no mistake. The way the qualification standards are set up, only the biggest and smallest local businesses will benefit; all the medium-sized operations will be left at the wayside.

This is because only the big boys in local business have hundreds of millions of dollars lying around to invest in things like restructuring their operations to meet International Organization for Standardization (ISO) certification and other stringent quality control standards required by the industry.

On the other hand, the very small local businesses would be able to sneak on board because it is easier to meet the industry requirements for very small-scale contracts, which would most likely be given out on a piecemeal basis as support to contractors.

When I raised this issue in the question-and-answer session at the forum, I got thunderous applause because this issue is on the minds of all Guyanese, especially those in the local business community who deserve the best chance to become main suppliers of our very own oil and gas industry.

Since Guyanese businesses are inexperienced in this industry, there is very little room for them in the industry right now. This means that for the vast majority of contracts, the oil company and its prime contractors will be forced to select people from places like Trinidad, the UK, Europe, USA, etc.

It is not the oil company‘s fault that Guyana is in this situation, but ExxonMobil needs to pay close attention to this because it will feed the propaganda of conspiracy theorists who claim that ExxonMobil is only paying lip service to Local Content.

For example, at the forum I spoke to a representative from a prime contractor that has been supplying and operating medevac and transport helicopters in the Trinidad and Tobago oil sector for 50-plus years. This took

more than 10 years for the Trinidadians to be prepared. “Trinis” make up almost all the staff.

Guyana has to put a plan in place now so that all or most of the helicopter and plane pilots in our industry will be Guyanese. The representative, a Trinidadian, said it took the people there 30-50 years to understand oil and gas, but our industry is moving so fast that we have to understand it in less time.

I spoke to a lady from SBN Industries, a company that specializes in manufacturing cable support systems and other accessories for oil and gas. Based on what the lady saw here, she estimated that it will take Guyanese 10 years to be ready to get significant contracts or subcontracts in the industry.

Guyanese are not fools. We accept that the standards in the oil and gas industry need to be high because risks are high, and we don’t expect handouts. But we don’t want to find ourselves in a position where the oil company simply says these are our high standards; get yourself in order; take it or leave it.

ExxonMobil got a great deal from Guyana and they keep finding even more oil deposits, so they will get even greater profits. Thus, we need to put a powerful Local Content policy in place to get the company to help Guyanese businesses to meet industry standards and to participate in the opportunities it provides.

Government has to make sure that ExxonMobil and its affiliates go out of their way to make Guyana a model country for oil and gas production. Of course, protection of the environment must be a top priority in this exercise.

In this regard, I commend the company for helping to set up the Centre for Local Business Development, which I understand is doing excellent work along with the Institute of Private Enterprise Development (IPED) to educate the local business community and point them in the direction of meeting industry standards.

I was extremely disappointed that our banking sector did not send even one representative to the forum; not one, none, zero! Many participants observed this and, like me, were very concerned because this country needs the full support of banking sector to benefit from oil and gas.

I was also disappointed that no ministers, permanent secretaries or highranking Government officials were present at the event. I understand that it clashed with Budget, but Guyanese also need maximum government support to access finance and training to meet the high standards required by the industry.

In a related incident, I was at the Roraima Airways lounge for business class passengers at the Cheddi Jagan International Airport and I saw persons who were identified to me as oil rig workers in an obviously drunken state, using filthy language and misbehaving in a most unruly and objectionable manner.

From their accents they seemed to be from the UK and Ireland and they became combative when I tried to correct them. They told me they were there to help Guyanese “get up in life and make money” and they were working for weeks and wanted to have fun. I told them to find a bar and misbehave there.

Clearly, Guyana and the oil companies operating here have to enact and enforce a strict code of conduct for foreign workers in oil and gas. We cannot allow such persons to come here and bring the worst behaviour from their home countries to degenerate our society.

Also, the British High Commission, Exxon and their contractors need to give these foreign workers classes on how to conduct themselves with elegance. When they boarded the plane, they rudely took the blankets and pillows that were reserved for the paying business class customers and air hostesses had to stop them.

Something needs to be done with the workers coming from Australia, Ireland and England, as well as other European countries. Their vile behaviour is disgracing their countries as well as ExxonMobil, for whom I currently have a high regard.

In conclusion, I thank ExxonMobil and the Centre for Local Business Development for hosting a wonderful forum and exhibition. It inspired me to raise the bar for my small businesses to meet the criteria set by international companies, not for greed, but so that I can be an active and interested participant in our new oil-based economy.

Guyana has a lot to gain from oil and gas, but we cannot take anything for granted. We have to look, learn, keep our heads on and seize every opportunity to maximize our benefits.

Yours faithfully, Roshan Khan Snr.