Local companies must act fast to capitalise on oil blocks bid round – GMSA

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Black Immigrant Daily News

The content originally appeared on: INews Guyana

…urges companies to form consortiums

With the Government’s announcement that 14 oil blocks will be up for an auction open to both local and foreign companies, the Guyana Manufacturing and Services Association (GMSA) is urging local companies to capitalise on this opportunity and to form consortiums if necessary.

During a press conference at their offices on Waterloo Street, the GMSA lauded the Government for its transparency in announcing the bid round ahead of time. GMSA executive Ramesh Dookhoo noted that there is an opportunity for even more local content, with this auction.

“We believe there is huge opportunity for local business. The issue of energy, as you know especially for the manufacturing sector, has been a huge issue. If we put 14 more oil blocks out there, imagine what the supply chain of liquid petroleum gas would (bring).”

“And look what that improved supply would do for prices. We believe there is huge opportunity for local content to be further developed. And for more Guyanese companies to benefit from local content and trickle-down benefits,” Dookhoo said.

GMSA Executive Ramesh Dookhoo and the association’s President, Rafeek Khan, during the press conference

Meanwhile, GMSA President Rafeek Khan emphasised that now is the time for these companies to capitalise on the opportunity presented by the Government’s announcement – and possibly even form consortiums.

“I would say sometimes we were sleeping at the wheel and businesses (did not) realise the growth of our economy. So, this announcement will further help our companies, those especially who have been trying to be a part of the energy mix.”

“And I would like to strongly suggest that those companies who have been seeking opportunities, now is your time. This recent announcement is going to help us prepare ourselves.”

GOGEC

Meanwhile, the Guyana Oil & Gas Energy Chamber (GOGEC) has also lauded the Government for the announcement of the bid round. In a statement, GOGEC President Manniram Prashad congratulated the Government on the transparency with which they are administering the sector.

“GOGEC is pleased with the open and transparent process in this regard and also welcome the opportunity for local companies being able to participate in the bidding process – an important favourable consideration on the part of the Government,” Prashad said in the statement.

“GOGEC believes that in this way, Guyanese have the opportunity to be part of the upstream activities in a more meaningful and tangible manner as the local private sector continue to build capacity through formation of consortiums and strategic partnerships with foreign companies.”

And similar to the GMSA’s urgings, the GOGEC President also encouraged local companies and Guyanese in general to take advantage of this unique opportunity to take part in the oil and gas sector, through the bid round.

Consortiums

The President Dr Irfaan Ali-led People’s Progressive Party/Civic (PPP/C) has on several occasions publicly called for local companies to form consortiums in order to compete in the energy sector. While it is an important call, Dookhoo said it is nevertheless having a hard time getting through to certain sections of the private sector.

“We still see our businesses as competing with each other’s. And I believe you’ve heard the President speak on this. Especially those businesses that are family-owned. Some of them don’t speak to each other. And this is a culture that needs to change.”

“The important catalyst in that cultural change, is perhaps the President himself… I believe when all of us start to feel the squeeze form foreign investment, that is when we’re going to wake up and smell the roses. And that is when we’re going to make a consorted effort to come together.”

Khan meanwhile urged businesses to come to and challenge the GMSA with their ideas for forming consortiums and bidding for the oil blocks. And he noted that when businesses come, it must be with confidence, a willingness to leverage their assets and time and to “take risks.”

“The GMSA can support them by getting the relevant information from the Government to help our businesses be better prepared. It’s going to be in a matter of months before the opening of this auction. I don’t know if it’s enough time, but I must say we need to work fast to helping our businesses get prepared.”

“Because before mid-2023, this auction will be finalised and we want to be better prepared. So, I want to see businesses come forward. Bring your ideas. Challenge us at the GMSA, to see how you can play a better role. But you must put your business in order,” he said.

Just last week, President Dr Irfaan Ali officially launched the much-anticipated first auction of the remaining oil blocks. There will be 14 oil blocks up for tender including 11 in the shallow area and three in the deep-sea area. These blocks will range from 1000 square kilometres (sq km) to 2000 sq km but with most of the blocks being approximately 2000 sq km.

“We’re hoping that the course of the submission of the bids will be on the 14th of April, 2023 and our timeline is to have contracts awarded by end of May 2023. This of course will follow negotiations and evaluation of the bids that we received during this bidding round…,” the President had disclosed.

Each bidder would be charged a participation fee of US$20,000 to join the auction and according to President Ali, this cost was settled so as to not dissuade interest in the bidding process. The payment of this fee will allow bidders access to a virtual data room which will have all the details on the blocks so that interested parties can participate in a competitive bidding process.

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