Local Content Act: a clear framework for Exxon to provide opportunities

Guyana’s Local Content Act provides a guideline for oil and gas companies and open the doors to numerous opportunities for Guyanese businesses and citizens.

That’s the perspective of the President of ExxonMobil Guyana, Alistair Routledge, during a press conference at the company’s headquarters in Duke Street, Kingston on Wednesday.

Passed in 2021, the legislation is one of the flagship laws of the People’s Progressive Party/Civic (PPP/C) Government.

It allows Guyanese businesses to benefit from employment and contractual opportunities that supply a variety of goods and services to the oil and gas sector.

The Act defines 40 sub-sectors that include transportation, accommodation, legal services, marketing, and public relations. The Act makes it mandatory that a percentage of these goods and services must be provided by Guyanese.

Routledge lauded the legislation, saying that it provides another avenue for Guyanese to benefit from developments in the oil and gas sector.

“We recognise that this is Guyana’s resource, [and] we want the people not only to benefit from what we pay in royalties and profit share or taxes, but also in the development phase; we are making opportunities available as quickly as we can for people to be employed and for businesses to benefit and grow,” he said.

Routledge pointed out the Act’s usefulness is ensuring foreign companies have the opportunity through a clear framework to partner with local businesses to provide a higher level of service to companies operating in the oil sector.

“I think where the Act has been helpful…is for new entrants to the country being clear on the basis of which they are expected to come in and encouraging them to partner with local investors and companies. I think that has been helpful, [giving] clarity for new investors in the country,” Routledge said.

The Local Content Secretariat manages the Local Content Register, a database containing the names of over 900 local companies qualified to benefit from opportunities provided under the Act.

This agency, Routledge noted, has played a critical role in streamlining communication between the Government of Guyana and ExxonMobil.

As a result of the Local Content Act, local companies have earned nearly US$1 billion to date.

By the end of the year, several other opportunities will open up in areas such as transportation, electrical, plumbing and administrative support.

The passage of this legislation fulfils the PPP/C’s promise to implement “strong local content” for Guyanese.