By Arthur Deakin
In February 2021, the new Guyanese government released the first draft of their proposed local content policy for the energy sector. Local content regulation defines how much local labor is utilized during the development of an industry – a fundamental policy for any country that has just discovered vast natural resources. Guyana, who has uncovered 10 billion barrels of recoverable oil and billions of cubic feet of gas, will present its local content bill to Parliament before the end of 2021.
The Guyanese media has released some excerpts of the updated draft and it is almost identical to the bill presented in February. Few changes have been made, mostly in the initial requirements for well 0drilling services, but nearly all sliding-scale targets remained the same. Although Guyana has no local production of steel, 50 percent of steel plates will have to come from a local company within three years of a project being sanctioned. These high thresholds for raw materials will force local companies to depend on imports, leading to supply chain bottlenecks and extra costs that can hinder project development.