Guyana Government Strengthens Local Content Framework in Oil and Gas Sector

Natural Resources Minister, Vickram Bharrat

Introduction to Local Content Framework

GEORGETOWN, Guyana, CMC—The Guyana government said Monday it is intensifying its efforts to strengthen the local content framework in the country’s oil and gas sector, with new commitments aimed at increasing efficiency, tightening legal definitions, and expanding opportunities for local businesses.

During the recent Local Content Summit, Natural Resources Minister Vickram Bharrat announced a significant step forward in the certification process, committing to a three-week timeline for issuing Local Content Certificates for applicants with complete and verifiable documentation.

“If your ducks are lined up, then I don’t think it should take more than three weeks to receive your certificate,” he said.

Current Status of Local Content Certification

The Ministry of Natural Resources issued a statement on Monday stating that this pledge comes amid persistent calls from local businesses for shorter approval times to participate in the country’s rapidly growing petroleum supply chain.

It said that since the passage of the Local Content Act in December 2021, hundreds of Guyanese companies have received certification, positioning themselves to deliver services ranging from logistics to catering and transportation to offshore operators and their contractors.

“To date, 1,250 Guyanese companies have registered with the Secretariat, tapping into a supply chain that has witnessed over US$1.5 billion spent on Guyanese businesses,” the ministry said.

Challenges in the Certification Process

However, it noted that the certification process has not been without challenges. Bharrat said attempts by some to exploit loopholes have led to delays and forced the Local Content Secretariat to tighten scrutiny.

Unfortunately, the process slowed down a little bit because we had some issues with individuals trying to front for companies or forge documents. Too many people are looking for a loophole or a crack in the system…

“Even though the application process was seamless, the team at the Secretariat did a lot of work to ensure that this process was so,” Bharrat said.

Legal Reforms to Strengthen Local Content Framework

Legal Officer at the Ministry of Natural Resources, Michael Munroe, said that legal reforms are also on the table to further close these loopholes. A major area under review is the definition of who/ what qualifies as a “Guyanese company” under the Act—a key criterion for certification.

“With the current definition, the company needs to be beneficially owned by a Guyanese, with supporting operational and structural management of the company,” Munroe said.

“Some Guyanese are leveraging their nationality to allow foreigners, who should be the minority shareholders, to more or less beneficially own the company.”

Strengthening the definition would require a residency requirement and the obligation for applicants to be registered taxpayers in Guyana. Given the context of the changes, Munroe said that these reforms cannot be rushed.

“We want to ensure that there is a legal force with what we are trying to achieve,” he said, adding, “These are things we have to take a measured approach to ensure consistency in the application of the Act.”

Expansion of Services Covered Under the Act

In addition to refining the law and expediting certifications, the government has signaled plans to expand the schedule of services covered under the Act. The existing schedule outlines 40 categories, including catering, transportation, insurance, waste management, and legal services, where foreign companies operating in Guyana’s petroleum sector must use Guyanese firms.

“We will expand the schedule to include more services where Guyanese can participate. The aim is to ensure even greater value retention in the local economy,” Bharrat said.

Conclusion

The government said this layered approach, which tightens the legal framework, streamlines bureaucracy, and expands opportunities, signals the government’s intent to entrench local participation in the oil and gas value chain.

“For the thousands of Guyanese entrepreneurs and workers hoping to benefit from the sector, the promise of faster certification and greater inclusion could mark a new chapter of economic Empowerment,” the ministry added.

Frequently Asked Questions (FAQs)

What is the local content framework in Guyana’s oil and gas sector?

The local content framework is a set of policies and regulations aimed at increasing the participation of local businesses and workers in the oil and gas sector.

What is the certification process for local companies?

The certification process involves the issuance of Local Content Certificates to companies that meet certain criteria, including being beneficially owned by a Guyanese and having supporting operational and structural management.

What are the challenges faced by the certification process?

The certification process has faced challenges such as attempts by individuals to exploit loopholes, forge documents, and front for companies.

What are the plans to expand the services covered under the Act?

The government plans to expand the schedule of services covered under the Act to include more categories where Guyanese companies can participate, with the aim of ensuring greater value retention in the local economy.