Oil and Gas: Local Content and the Public Interest
Like so many other institutions and individuals in Guyana the Stabroek Business has been observing local developments at both the public and private sector levels as well as the contemplations of public commentators in the matter of what now appears to be the imminent commencement of the exploitation of oil and gas in Guyana’s territorial waters beginning in 2020. Then, of course, there are the various (frequently, ill-informed) musings of ordinary people who are perfectly entitled to their dreams and their predictions but who, nonetheless must be educated regarding some of the changes that they can expect in a so-called oil economy.
Both the government and private sector have enjoined the public discourse on oil and gas though it has to be said that a lot of it has happened over the heads of a number of Guyanese not all of whom can accurately be described as uneducated. Thrice in the past few weeks we at the Stabroek Business were required to provide explanations to perfectly intelligent people on the meaning of Local Content and once we did, in each instance we were told that if Local Content had to do with what one might call the non-oil and gas ‘spin offs’ that can derive from the oil and exploitation then there was need to do more to publicise its significance.
The World Bank itself defines Local Content as “The extent to which the output of the extractive industry sector generates further benefits to the economy beyond the direct contribution of its value-added, as through links to other sectors.”
Once our enquirers came to an informed understanding of Local Content and its significance the question then arose as to whether it might not be a good idea for far more information on Local Content to be placed in the public domain since what that might do is to create oil and gas-related employment – or at least employment opportunities – that would predate the actual exploitation of oil itself.
This of course is not to say that private sector entities and individual ‘free lancers’ have not already begun to contemplate, and more, some of the Local Content possibilities that may emerge between now and 2020. Our concern has to do with whether or not it may not, even now, be altogether worth the while, for there to be much more deliberate and coordinated focus on identifying the various types of Local Content opportunities that are likely to exist so engage the two private waste disposal entities on the matter of them resuming duties in the capital at the earliest possible time even though there is no sign of any negotiations between City Hall and the two companies.
By this week, however, signs were beginning to emerge of a likely resolution of the huge debt to the two companies in the form of a government bailout of a cash-strapped City Hall. However, while it is believed that engagements towards that end have been taking place, the Cevons Waste Management boss told Stabroek Business on Wednesday that he would offer no comments on such discussions as might be ongoing until the outcomes are clear.
that we can initiate a regimen of preparedness to take advantage of those opportunities.
One makes this point against the backdrop of the evident need for job-creation in Guyana long before the economy begins to benefit from oil exploitation and given the fact that if we broaden the base of our thinking of Local Content beyond that which is already being contemplated, we may well find ourselves in a position where a carefully thought out Local Content policy may benefit the Guyanese people as a whole way beyond the extent to which we might have anticipated.
This is, in the first instance, a state responsibility. Our pursuit of a structured and rewarding Local Content Policy does not require a reinvention of the wheel since there is nothing wrong with us copying from what already exists. What it does require is an official mind-set that seeks to extract all that we can get as a nation from the blessing of oil and gas (while, of course, being mindful to guard against the pitfalls associated therewith) and in this context it may even be well worth the whole for a modest measure of expertise to be recruited
Government, Stabroek Business understands, has taken “the practical step” to come to the rescue of City Hall in order to stave off what could escalate into an ugly garbage disposal crisis in the capital in circumstances where, given the anticipated significant increase in domestic refuse associated with Christmas, the situation could spiral out of control
towards the creation of a public/private sector Local Content initiative aimed at ensuring that the opportunities that emerge therefrom (which may well be worth several millions of dollars, at the very least) go as much towards genuine job creation as it would towards the consolidation of already existing private sector companies. In saying so, of course, one understands that the beneficiaries of Local Content will be those entities/individuals who have the tools with which to deliver what the market demands.
All of this leads to making the point (and it has been made before) about the role of government, private sector and the media in ‘sizing’ the level of the public discourse on ‘oil and gas’ to render it accessible to the nation as a whole. Surprisingly, there has been no serious attempt anywhere so far to ease the discourse far enough outside the salubrious settings where experts discourse with informed audiences and issues get reported on with a level of complexity that, too often goes over the heads of audiences that also have a vested interest. That has to change.