The final document must ensure that oil increases the value of other industries
Understanding the Draft Local Content Policy (Part 2)…
Kaieteur News – Today, Kaieteur News is continuing with Part 2 of its initiative, which aims to provide the public with a simpler understanding of the draft local content policy which is currently undergoing a month-long consultation process under government guidance.
As a brief summary, yesterday this newspaper explained that the policy proposes that local content should be considered the amount of local goods and services inputs, including employment, provided to oil and gas operations. This happens when operators hire local people as workers or contractors or buy goods or services from them.
It therefore means that Guyana should aim to: maximize the level, quality and benefits of participation in the value chain of the Guyanese petroleum sector.
Equally important is the aim of ensuring that the policy seeks to ensure that value extends beyond the oil sector. As such, it is necessary to examine, as a whole, the possible forward, lateral and backward links.
According to the draft document, backward links are those created by the commercial links between oil operators and their supply chains, which include technology and knowledge transfer, employment of nationals, and sourcing of local goods and services.
Lateral links use the sector’s demand to develop skills, services and infrastructure that can have a positive impact on other sectors of the economy while allowing local people to participate in the petroleum supply chain. An example of this would be investing in training Guyanese who can serve a dual purpose, i.e. for agriculture and oil and gas for example.
Forward connections include building facilities that process and export these resources, such as refineries and petrochemical facilities.
So it means that Guyana’s local content policy must have provisions, which support maximum participation of its people in different aspects of the oil sector as well as ensure that other sectors such as the agricultural industry are adequately supported . This is to ensure the prosperity of the country beyond oil.