Mexico



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Local goods and services first and by a significant percentage too - Institute of Americas

IOA

Mr. Roger Tissot delivering the # localcontent pre-conference workshop at La Jolla Conference at the Institute of The Americas, University of San Diego # LJC2018 @ IOA_Energy

By Abena Rockcliffe-Campbell

SAN DIEGO, California
Petroleumworld 05 24
2018

Even without legislation in place, Guyana's neighbour to the South, Brazil, has a most rigid approach when it comes to local content. The country ensures that companies put local goods and services first and by a significant percentage too. A failure to honour such commitments would lead to enormous fines.

This was pointed out yesterday during a Local Content workshop that was organized by the Institute of Americas at its headquarters in San Diego, California.

Participants have been drawn from Guyana, Brazil, Venezuela, and Argentina. The session saw two speakers. Experienced engineer and Oil and Gas consultant, Brazilian Nelson Narciso, was one of them.

During his presentation, Narciso explained that local content is of strategic importance to a country because of the lasting benefits it brings to the nation, such as enhancing the domestic industry and generating more income and jobs for the population.

He said that local content is more than “lip-service” for Brazil. Operators are expected to say up front what percentage of local goods and services they will use for specific projects. If the company says, for example, that it will use 50 percent of locals for repairs to be done at one of its offices, failure to honour that commitment would lead to an immediate fine by the regulator.

He said, too, that there are specific local content requirements that are outlined in the contracts of the oil operators in Brazil.

Narciso also gave the case where BG Group Plc., the U.K.'s third-largest natural-gas producer, paid US$71M in fines in Brazil for breaching local-content rules at an offshore project where it didn't find commercial volumes of oil. This was back in 2015. The Energy Consultant said that there have been many other fines of this nature.

“I believe that if the company meets the minimum requirements or even over achieves, it should be rewarded. But there should be fines for when they do badly. We need to recognise who is doing the good and who is doing the bad. If there are no fines then you are doing nothing,”

The oil consultant added, “You must have a balance in the industry. That is what I found in my experience. Everyone agreed in Brazil that there should be a fine.”

Narciso said that there has been much push back by industry stakeholders on the rigid fines. While there has been consideration to relax those fines, the consultant told Kaieteur News that there is wisdom in the approach to have such provisions. He noted, too, that it is an important lesson for any emerging oil producer.

Narciso was Director of the Brazilian regulatory agency for oil, natural gas, and biofuels (ANP) from 2006 to 2010. During his term, he led the creation of the Local Content Coordinating Body, led the Gas Flaring Reduction programme, the Improvement of Production Fiscal Metering programme, Bidding Rounds and Integrated System for products movement. He is currently an international consultant for the oil and gas energy.

The second draft of Guyana's Local Content Policy does not make a single provision for a fine or penalty to be instituted if there are local content breaches.

The document does, however, pave the way for a regulator of local content in Guyana.

(More on the Local Content framework can be seen online via the following link: https://www.nre.gov.gy/wp-content/uploads/2018/05/Second-Draft-Local-Content-Policy-Framework.pdf)

Petroleumworld.com

Hit your target - Advertise with Us

Story by Abena Rockcliffe-Campbell from Kaieter News, reporting from California

Kaieteurnewsonline.com
05 24 2018

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter

 

 

 

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.