Guyana’s government on Thursday delivered to the National Assembly the draft of a local content bill that will regulate its nascent oil industry, proposing requirements beginning at 5% by the end of 2022 for activities to be carried out by contractors and licensees.
The proposed policy, seen by Reuters, relaxed some of the minimum requirements that a previous bill draft included earlier this year, and proposed that companies submit performance reports and be subject to government monitoring, while establishing penalties for companies not complying.
“It is not a bill that is drafted in vacuum,” Guyana’s President Irfaan Ali said on Wednesday.
“Having local content is an issue that requires balance. It requires a thorough and sometimes sophisticated understanding of the realistic opportunities that are inherent in the development of a new sector like oil and gas,” he added during a public event in Georgetown.
Pressure has built in recent months over oil companies operating in Guyana, which have so far confirmed some 10 billion of recoverable oil and gas resources, as the government tries to secure jobs and business opportunities for the Guyanese.
The government has called a consortium led by U.S. oil major Exxon Mobil https://www.reuters.com/business/energy/exclusive-exxon-talks-build-fourth-oil-production-rig-guyana-2021-11-11 and its business partners to locally assembly at least a portion of several multi-billion-dollar production units to be added to current infrastructure.
But at the same time, analysts and experts have voiced concerns over too-rigid local requirements in the years to come, when the South American nation is expected to still be developing capacity to meet steel, parts, workforce and services demand.
