Boyer calls first oil without local content policy a fail

With first oil on the horizon, the Georgetown Chamber of Commerce and Industry (GCCI) has lamented the fact that the A Partnership for National Unity+Alliance For Change (APNU+AFC) government is yet to provide feedback on and finalise the third draft of the national Local Content Policy that was released to the public some weeks ago for comments.

“Since we had sent those comments out… we have not heard any further word from the Department [of Energy] in terms of when this draft local content policy will stop being a draft, and when it will be put into action,” GCCI President Nicholas Boyer told reporters during a press conference on Wednesday.

Boyer, while decrying this state of affairs, noted that a final policy is needed even more in light of the fact that the timetable for first oil has been brought forward.

On October 31st, 2019, Stabroek News had reported that Hess, ExxonMobil’s partner in the Stabroek Block, had announced that the Liza Phase 1 project is now targeted to start in December and will produce up to 120,000 gross barrels of oil per day using the Liza Destiny Floating Production Storage and Offloading vessel which arrived in Guyana in August.

“I have seen recently in the news that we could be expecting first oil as early as

December or later, and it would be remiss of us to have first oil happen and not have a local content policy in place”, Boyer said, while stating that “for us to have a national resource be exploited and not have the regulatory architecture in place, especially a local content policy…I guess it’s really a failure on our part”.

He suggested that Guyana should have been finished with its own policy by now, given its engagements with Ghana, which moved from discovery to production of petroleum in three years, while successfully implementing a local content policy, regulatory architecture, and commission in that time.

“We are not doing as well as they did and we are…I guess lagging behind in terms of where they were when they were having their first oil lifted,” Boyer observed.

Asked whether legislation was expected in light of the coalition government’s caretaker status, and whether whatever is produced in the absence of legislation is likely to be effective, Boyer said “we are desirous of legislation, and we understand that given the interim status of government, we are not going to get legislation, but that does not stop us from getting a policy implemented by the Department of Energy… they sent out that policy for review, they should have the power to implement that policy, and we would like to see that policy implemented as soon as possible”.

Boyer also shared that he hopes that the ethos of the companies operating in the petroleum sector will follow a finished policy, even in the absence of binding legislation. In any event, he said, the alternative is nothing, while noting that something is better than nothing.

GCCI Senior Vice-President Timothy Tucker echoed the sentiment that it is better to have some policy, as opposed to no policy.

Turner noted that companies operating in the oil and gas sector are requiring potential employees for various posts to have experience in the oil and gas field, which, he says, disqualifies many Guyanese.

“Everybody believes [local content] is about buying stuff from this businessman and the private sector. It’s everybody it is affecting,” Turner said.

He also shared said that the lack of a policy or law on the issue is allowing companies to bring expats to work for 180 days, after which thy return overseas to avoid paying taxes, before returning to continue working.

Meanwhile, Deodat Indar, former GCCI President and current executive member, said that the current policy might not be exactly what is wanted, but it may be what is needed to stem the bleeding of jobs. Indar said that GCCI had called for a policy to be implemented a year ago. Instead, “nobody did anything,” he lamented.