By: Antonio Dey | HGP Nightly News |
The Government of Guyana is moving to revise the Local Content Act of 2021 as part of efforts to expand opportunities for Guyanese businesses and workers within the rapidly growing oil and gas sector.
This was confirmed by Minister of Natural Resources Vickram Bharrat, who announced the signing of the Petroleum Exploration License and Production Sharing Agreement (PSA) for the S4 offshore block.
According to the Minister, the Local Content Secretariat has already initiated consultations with local businesses and stakeholders.
“The Local Content Secretariat has already begun the consultation process. Michael Munroe, the Director of the Secretariat, has sent letters to numerous businesses asking them to submit to Schedule One of the Local Content legislation,” Bharrat stated.
Expanding Beyond the Current 40 Categories
Under the current Act, the First Schedule identifies 40 categories where Guyanese must be given priority for employment, services, and procurement.
These include areas such as transportation, catering, rentals, fabrication, and several technical services.
Minister Bharrat says the government intends to increase the number of areas where Guyanese can participate and adjust the targets for existing categories to ensure greater equity between foreign and local companies.
“The government plans to expand these areas and modify the goals for the current work categories set aside for local involvement,” he noted.
New Fiscal Regime Applied to S4 Block Agreement
Minister Bharrat also highlighted that the newly signed PSA for the S4 block is the first to be executed under Guyana’s updated fiscal regime, which includes:
- 10% tax (up from 0% under previous agreements)
- Stricter requirements for transparency and accountability
- Revised profit-sharing terms
“The new fiscal regime will be applied to this agreement. Taxes will now move from zero to 10 percent, and this is the first time we are signing under a new fiscal regime,” Bharrat said.
Enhancing Local Equity in Oil & Gas
The proposed revision of the Local Content Act, the Minister explained, aims to ensure greater inclusion and fairness, particularly as more multinational companies enter Guyana’s petroleum sector.
The updated legislation is expected to boost local employment, stimulate small and medium enterprises, and build long-term capacity for Guyanese nationals.
The consultations are ongoing, and the revised legislation will be presented after incorporating feedback from all key stakeholders.
