Oil and Gas sector: Regulatory body proposed to safeguard Local Content

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The Government of Guyana has embarked on a consultative process aimed at crafting a Local Content Policy aimed at securing the input of Guyanese in the emerging oil and gas sector and such as has proposed new laws along with a regulatory body to oversee the industry.

The proposal has been outlined in the Draft Local Content Policy crafted by Trinidadian Energy Expert; Anthony Paul.

According to the draft supplied by Paul and for which Government has begun to embark on finalising, the Local Content Policy will be enforced through appropriate legislative mechanisms and be regulated by “a capable, well-resourced and accountable institution.”

Paul in his Draft Policy—to be supported by proposed laws—has proposed that the regulator will be overseen by a multi-stakeholder body representing those Guyanese parties involved in delivering national development and sector goals that support and/or are impacted by local capacity development and participation in the sector.

The Regulator will report to the people of Guyana through their elected representatives in the Parliament of Guyana; meaning that this will essentially fall under a Ministerial portfolio.

The proposed regulator for the local content aspect of the industry is also earmarked to require international operators and contractors to manage their procurement through local content policies.

Political Divide

Meanwhile, cognisant of the political climate in Guyana, the Trinidadian Industry expert has written into his draft proposal for a Local Content Policy, the need for cooperation across the political divide.

According to Paul in his draft policy document, investments and activities in the sector require long timelines, often out of sync with national election cycles. As such, “robust management of the sector to enable maximum benefit capture therefore requires a common vision or aspiration for the sector and country, across the political divide, which lends itself to predictability in policy direction and sector governance.”

ExxonMobil and the Guyana government in February last had hosted high-level consultations with key ministers, opposition parliamentarians and Opposition Leader, Bharrat Jagdeo.

Minister of Natural Resources, Raphael Trotman at the time had committed to having Guyanese at all levels, including those living in the United States, Canada and the Caribbean, being briefed on the developments in the sector.

According to Trotman at the time, “It is important, as Guyanese and particularly as policy makers, that we know what the resources are, how it is going to be exploited and captured and developed and very importantly how are we going to use the resource for the benefit of all Guyanese.”

Despite the assurances, the Opposition Leader this past week lamented the level of consultations and briefings that are being held with the opposition members on the development of the Sector.

Natural Resources Minister, Trotman had recently pointed to ‘frequent’ briefings being afforded to the political opposition—a notion dispelled by Jagdeo.

He gave as example a recent meeting held in Texas, USA where the Ministerial Sub-Committee along with the President’s Petroleum Advisor, met with a team from ExxonMobil but the matter only came to light when it was reported in the media.

Both Government and ExxonMobil were silent ahead of the excursion to the US.

Jagdeo this past week during the party’s weekly engagement with the local media corps had lamented the state of affairs.

Jagdeo told reporters he was unaware as to what Trotman meant by ‘frequent briefings,’ since it was only after it was discovered by the media that five Government Ministers visited Exxon Mobil’s Headquarters in Texas, USA, he received a call from the oil company to brief him about what was told to the Ministers while on the trip.

According to Jagdeo, “After the media discovered this, and then it became a public issue, I got a call from ExxonMobil to say that they wanted to brief me about was told to the Ministers in Texas, and I was thankful for it, and I had that briefing…But I don’t know what Trotman means by frequent briefings.”

He was adamant the Administration “should have disclosed the visit and the circumstances under which they were going and all of the financial issues etc. before they left, and they should have explained why they did not take any technical people.”

Those who travelled to Texas to meet with the Exxon Mobil executives included Ministers Trotman, Carl Greenidge, Winston Jordan, David Patterson and Dominic Gaskin.

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