Local Content must be measured by value of contracts – Dr. Jagdeo

Vice President, Hon. Dr. Bharrat Jagdeo says local content must be measured by the value of the contracts given to Guyanese firms by oil companies, rather than the amount.

During his guest appearance on a Facebook live interview with the ‘Guyanese Critic’ on Thursday, the Vice President said he noted this advice from Trinidadian energy strategist, Mr. Anthony Paul.

Vice President Dr. Bharrat Jagdeo

Dr. Jagdeo explained that a company can easily say it hired 20 Guyanese to provide food supplies, but omit the truth about quantity.

“And when you check the 20, they’re only supplying two baskets of bora or mangoes, and the bulk of it is coming from one big supplier from abroad.

So, if you measure by volume, it would say 20 Guyanese versus one foreigner supplying food. But when you look by value, you’d see that they are earning a pittance,” he said.

Mr. Paul, a local content expert who serves on the Government’s local content advisory panel, is quoted in Kaieteur News as saying “I like to think of local content as something we can measure because if we can measure it, then we know how well we are doing.

People often describe local content as the number of people employed; the number of companies engaged. But remember, every activity has to be budgeted for. As such, I like to think of local content in a monetary sense. I ask, ‘what is the value of inputs for the activities being carried out in the sector?’”

Dr. Jagdeo said the Government will enforce the principle of measuring what oil companies are doing, and “not to leave it just at their word.”

The Government’s draft local content policy saw widespread consultations with industry stakeholders, through a process spearheaded by President Dr. Mohamed Irfaan Ali.

The Government drafted the policy, after a report, which incorporated stakeholders’ views on the way forward, was submitted by the local content advisory panel.

Government intends to set stipulations in law to ensure contractors facilitate maximum penetration for locals in the oil and gas value chain.