Local businesses seeking to expand their participation in Guyana’s oil and gas sector must look beyond securing contracts and focus on building sustainable business models, investing in human resources and strengthening their operational capacity.
This according to Michael Munroe, Director of Local Content, who spoke to Guyanese businesses already in oil and gas and those hoping to join at the recent Guyana Supplier Forum.
Munroe stressed that oil companies offer chances for local businesses, but it’s up to those businesses to prove they can deliver what’s needed. Further, he warned that companies shouldn’t see contracts only as ways to make money. Instead, they should use them to improve their operations and build businesses that can handle industry challenges.
“Guyanese businesses need to look beyond a contract as just an opportunity. They need to look at their business models to ensure that what they are doing in the sector they are operating in, their business model is sustainable to ensure they can weather some of the challenges,” Munroe said.
Munroe said that investing in systems, technology, and people is especially important for local companies that want to grow and stay competitive in the industry.
“In order for your business to grow, you need to scale and leverage efficiencies throughout your organisational chain,” he stated.
Munroe also said businesses should invest in training and developing their employees.
Beyond internal investment, Munroe identified collaboration as another important factor in helping Guyanese businesses expand their operations and access new opportunities.
He explained that growing a business might mean partnering with other companies, both in Guyana and abroad. He encouraged local businesses to look for collaborations that can boost their skills, resources, and market reach.
“If you want to scale, sometimes it requires you partnering with others, and in this case, when I say others, I mean Guyanese and non-Guyanese,” he said.
Munroe said the Local Content Secretariat keeps encouraging partnerships. He believes that local and international collaborations can help Guyanese businesses build capacity and take part more fully in the oil and gas sector.
However, he warned that these partnerships must be real and set up so that Guyanese businesses keep real value from being involved.
“These collaborations must be genuine. Don’t let yourself be used in a way that doesn’t keep the value you want to see stay in the country,” he warned.
With 10 years at the Local Content Secretariat, Munroe said he’s concerned that some businesses don’t fully understand what’s needed for beneficial ownership under the Local Content Act.
He said businesses need to look at the rights and duties set between partners and see if Guyanese shareholders really have control and ownership of the company.
Munroe noted that some partnerships look fine on paper but don’t measure up when you check who really owns and makes decisions in the company.
“When you think about it in that context, I find a lot of these collaborations are wanting in terms of, is this a genuine partnership?” he questioned.
Munroe also said that growing local participation isn’t just up to the private sector. The Government also needs to help create the right environment for businesses to grow.
He called for efficient and responsive regulations that can keep pace with the changing demands of the industry, warning that administrative processes should not unnecessarily delay business activity.
“Government regulations must be nimble. We must be able to respond in a timely manner to ensure that we don’t become a spoke in the wheel, but in fact, we are accelerating the type of activity that we want to see,” he said.
He also said the Government is considering changes to the Local Content Act, including adding more areas where Guyanese businesses can benefit.
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