Government of Guyana Works to Improve Payment Period for Local Contractors in Oil and Gas Sector
Efforts to Improve Payment Period
The government of Guyana is working to improve the payment period for local contractors in the oil and gas sector. According to Minister of Natural Resources, Vickram Bharrat, the government is pushing oil companies to settle payments with contractors within 30 days of receiving a correct invoice. This marks a further reduction from the 45-day payment period, which was previously up to 90 days.
Challenges and Solutions
Bharrat explained that the government has managed to work on payments for local contractors because financing is an issue. He noted that if contractors are not paid within a certain period, it pushes them out of the sector, as they do not have the resources to continue functioning. The government is also working to resolve payment issues through local commercial banks, with instances where payments to local companies were made to be processed outside of Guyana.
Fronting Issue
Minister Bharrat also acknowledged the “fronting” issue, where non-Guyanese entities exploit local companies to access benefits meant for Guyanese. He urged local companies to avoid fronting practices and emphasized that the legislation was set up to benefit Guyanese, not Guyanese to use it to start the system and take away benefits from the country.
Training and Certification
The government is also investing in the training and certification of Guyanese workers to enable them to access higher-level technical roles in the oil and gas sector. The Guyana Technical Training College plays a key role in this effort, providing training opportunities for young Guyanese. Additionally, there are scholarships in place to further these goals.
Current Employment and Future Plans
Currently, over 6,500 Guyanese are employed in the sector, and efforts are underway to increase the number of technical officers and engineers working offshore. The addition of the fourth Floating Production Storage and Offloading (FPSO) vessel, One Guyana, set to start production in late 2025, is expected to boost local employment in the sector.
Conclusion
The government of Guyana is committed to improving the payment period for local contractors in the oil and gas sector, addressing the fronting issue, and investing in the training and certification of Guyanese workers. These efforts aim to increase local employment and ensure that Guyanese benefit from the country’s oil and gas resources.
FAQs
* What is the current payment period for local contractors in the oil and gas sector?
+ The current payment period is 30 days, a reduction from the previous 45-day period.
* What is the “fronting” issue?
+ The “fronting” issue refers to non-Guyanese entities exploiting local companies to access benefits meant for Guyanese.
* What is the government doing to address the fronting issue?
+ The government is urging local companies to avoid fronting practices and emphasizing that the legislation was set up to benefit Guyanese, not Guyanese to use it to start the system and take away benefits from the country.
* What is the current employment situation in the oil and gas sector?
+ Currently, over 6,500 Guyanese are employed in the sector, and efforts are underway to increase the number of technical officers and engineers working offshore.