With the Payara licence issued after a vigorous review of Exxon’s Field Development Plan (FDP), Vice President Bharrat Jagdeo has said that ensuring Guyana establishes a robust local content framework is the next priority for the Government.
The People’s Progressive Party (PPP) Government only took power in August. And by September, it was able to get Exxon to sign a substantially improved Payara permit, compared to the permits the former Government produced for Liza Phase 1 and 2 developments. At a recent press conference, he said the focus must now shift to areas like local content.
“We have managed the first act of the Government, to get a licence that looks like a normal licence. Very different from the one before. We have an environmental permit that looks like a normal environmental permit, not like the one before,” he said.
“Having completed this, how do we get more out of what was signed and out of the industry? And that is why we have started work already on the local content policy. So, we put the commitment in the licence, that they have to commit to the policy,” Jagdeo added.
According to Jagdeo, the next stage of their engagements with oil companies, particularly Exxon, will see the Government focusing on local content and the gas to energy project. Exxon is the only company in Guyana to have started producing oil, in the Liza field. Jagdeo was of the view that a robust local content framework will help to reclaim benefits that Guyana lost from the deficient agreements the former Government entered into.
“We hope those will bring significant benefits, clawing back some of the losses on the fiscal side that we had in the production agreement… we’re developing a Local Content Policy that will see this and all oil companies spend more on Guyanese business and Guyanese people being employed, at fair pay,” Jagdeo said.
According to him, this is important “so that hundreds of millions of dollars in business, that are being funnelled out of the country, that don’t help our people, that they remain here. That is a crucial part of ensuring we get more and that is the next frontier. We’ve completed this one, we work in stages. So, we’re going to move now.”
A testament to the seriousness with which the Government views local content is the fact that soon after entering office, it established a Local Content Panel.