Although the Local Content Act passed in 2021 has allowed Guyanese businesses to participate in the country’s oil and gas sector, the government is eager to review and amend the legislation to make it more robust. This was revealed by Vice President Dr. Bharrat Jagdeo in his keynote speech at the first-ever Local Content Summit, held yesterday at the Pegasus Suites and Corporate Centre.
The summit focused heavily on the development and structure of Guyana’s local content policy, local content certification, benefits for Guyanese, and the creation of partnerships to boost the economic development of the country’s oil and gas sector.
As he noted that the summit provided an opportunity for concerns and recommendations to be voiced, Dr. Jagdeo emphasized that the government’s participation was to provide insights and listen. He said, “Today, we are here to clarify from the government’s perspective, and to listen since this is the first of a series of meetings that we will be having over the next several months to review the Local Content Act.”
He highlighted that the 2021 Local Content Act required an iterative process to craft the legislation appropriately for Guyana and stressed that it was a “careful balancing act” that could not simply adopt practices from elsewhere and transpose them into local legislation. He also acknowledged that there were loopholes in the legislation and that widespread stakeholder consultations would be necessary to address them.
Since the Act’s passage, there have been heavy debates on how foreign companies operating in Guyana’s oil and gas sector have been finding ways to take advantage of the loopholes in the legislation. Referring to these debates, Dr. Jagdeo stated, “If we want local content and the building of Guyanese capacity to mean something and grow, it is important that we keep the industry dynamic and vibrant long into the future so that the local industry can develop capacity and scale in a sustained manner.”
The 2021 Local Content Act mandates that oil companies give Guyanese first preference when procuring goods and services from 40 specified sub-sectors and employ specific percentages of Guyanese for their operations. It also outlines that for a company to be considered “local” it must must be at least 51% owned by a Guyanese.
