GUYANA’s local content law is likely to affect future operations in the oil-rich South American country of one of its first and biggest investors, a Trinidad-owned company, Ramps Logistics.
Ramps Logistics, a family business from Cunupia, expanded to Guyana in 2013 – before ExxonMobil discovered oil in the South American country – and created a subsidiary called Ramps Logistics Guyana.
Two weeks ago, the Guyana Local Content Secretariat denied Ramps Guyana a local content certificate to operate in the country.
Ramps Logistics managing director Shaun Rampersad, who is also president of Ramps Guyana, said there was no reason why he was denied certification as he met all the requirements set out by law.
The Local Content Act was passed in Guyana in December 2021 to encourage development and greater participation by Guyanese nationals in the oil industry.
Requirements for certification include that the company be registered in Guyana, that 90% of its employees are from Guyana, that 75% of its management team be Guyanese nationals and that it be 51% owned by a Guyanese. national.
At a press conference last Thursday, Rampersad shared with the media documents his company had submitted to the Local Content Secretariat for certification.
He said he met the requirements, he was hurt that he did not even receive an explanation for the refusal or even a request for clarification of any of the documents submitted.
“It’s not just that we were denied the certificate. What has been circulating in the papers is that we are somehow trying to rip off the system or trying to find ways to get in,” he said in an interview. with the Sunday Express last week.
Due to the requirement that 51% of his business must be owned by a Guyanese national, Rampersad said he was struggling to find the right partner to divest the Guyanese business.
He didn’t want to just hand over majority ownership of the company – which he had struggled to build and which now employs around 400, mostly Guyanese workers – to just anyone.
He noted that Ramps Guyana made no money from 2013 to 2018 in Guyana and was largely funded by the company’s T&T operations.
He said that after transforming the company into a competitive regional business, he wanted a partner with strong business acumen and innovative thinking on how to improve and expand operations in Guyana.
He found that partner in his friend, Deepak Lall, a now naturalized Trinidad-born Guyanese citizen.
Lall’s birth in Trinidad to a Guyanese father and a Trinidadian mother was registered in Guyana in June 2021. His Guyanese passport was issued on September 9, 2021
Lall, a mechanical engineer, is the Managing Director of Point Lisas-based Qualitech Machining Services, a provider of machining, sales, and engineering and project delivery services in the Caribbean.
Based on his Guyanese passport, Lall became a shareholder of Ramps Logistics Guyana on March 9, acquiring 51% of the company in newly issued shares for $1 million.
Lall told the Sunday Express that as part of the wider diaspora, it was an entry to contribute to the country.
“My grandfather and his family had to flee their home, their business and the country they love because of persecution in the 1960s. They rebuilt themselves from scratch in the UK. My father immigrated to Trinidad in 1977 and has worked in the oil and gas industry ever since.
“I have followed the efforts of Guyana’s Foreign Secretary Robert Persaud and the Ministry of Foreign Affairs’ Diaspora Unit to bring the Diaspora back and contribute, and I am confident that I can contribute.
“Since early 2021, I have initiated and received my Guyanese citizenship as it is my birthright by descent. In doing so, I was planning my entry and investment in the country. I shared a business relationship of more than ten years with Ramps Logistics, and this opportunity to join them and invest in Guyana just happened by coincidence.
“Like all progressive people, you are always looking for opportunities. Prior to Guyana’s oil and gas opportunities, many nationals migrated to the United States, United Kingdom and the Caribbean. Now that there are opportunities back home, we’re happy to come back and explore them,” Lall said.
Rampersad said the government’s message was that it wanted to bring the diaspora back to the country.
“When we called the press conference, that’s what I wanted to say. I want to say to people listening, I think the government has a good plan for human development. I see a lot of good tone coming out like, we want investors to come in, Guyana is open for business, and the government understands that the diaspora holds a ton of resources that could develop the country.
“I think Guyana could become the Dubai of the Caribbean, but I don’t think that can be done without the contribution of the Guyanese diaspora. They hold billions of dollars in capital. They are extremely intelligent. They are well qualified.
“I know that Robert Persaud, who is the Minister of Foreign Affairs, continually talks about the diaspora network, interacting with having experience and working with multinational companies, right? It’s not something you get a lot in Guyana. So if you bring back that diaspora network, you could really propel development in Guyana and create opportunities for young people like never, ever, ever before.
The ExxonMobil Draw
Prior to the discovery of oil, Guyana was a Caricom-rated, investor-wary country that had haemorrhaged human capital over time, had low economic growth and limited prospects.
As a pioneer investor in Guyana, Ramps was “in the right place at the right time”, to quote Rampersad, when Exxon Mobil, an American multinational and one of the largest publicly traded oil and gas companies in the world, started discovering oil in Guyana in 2015.
In 2017, Ramps Logistics Guyana won a five-year logistics contract for ExxonMobil to coordinate its operations in Guyana.
Since then, Exxon has made 31 oil discoveries in its Stabroek block.
In April, the company announced that it had found oil in three new wells, bringing the recoverable potential of oil and gas from its discoveries to nearly 11 billion barrels.
Exxon and its partners – Hess Corp and China’s CNOOC Ltd – said they plan to pump 1.2 million barrels of oil and gas per day from the block by 2027.
According to energy trade publication Argus Media, Exxon now plans to produce more than 750,000 barrels of oil per day offshore Guyana by 2025, a figure equivalent to 20% of current global oil and gas production. company gas.
In November 2021, Exxon issued a tender for a new logistics contract for the next five years.
The deadline for submission was January 6, 2022.
Ramps’ current contract with Exxon expires in November 2022.
Rampersad said Exxon conducted all of its bidding through its global bidding system.
“Guyana was truly virgin territory. The reason we went there was really to service commodities and raw materials like bauxite, gold, timber, rice, all that kind of stuff. We thought there was a real opportunity around commodities, to get into commodity logistics or maybe even commodity trading.
“Exxon had unique challenges and they needed someone who had been in the field. And we’ve been there since 2013. We understood the local Guyanese landscape, but we also understood the international side because we’ve been in the business for a long time.
“Every dollar that we had available to invest, we pushed it to Guyana, to invest, to hire people, to build systems, to buy this, to do that, you know, and we just keep investing,” Rampersad said. .
Although he has no certification, Rampersad said he was able to operate until the end of the year.
“We are able to operate right now because the local content law that was enacted in December allows until the end of this year for companies that already have contracts, so we have all of our contracts that have been protected, that you can continue to operate until the end of this year without a local content certificate,” he said.
“But, you know, some of the main service areas that we provide are logistics, which includes personnel logistics, trucking, customs brokerage, lifting. Much of the law states that you must procure the services from local Guyanese businesses. A local Guyanese company is one that is deemed to have a local content certificate.
“So I mean, right now, if we don’t have a local content certificate, our business will be cut in half or maybe three-quarters because we can’t work in the oil and gas sector” , did he declare. .
“My only concern is to make sure our people obey the laws in Guyana and that we are able to operate legally in Guyana,” he said.
Last week, VICE News published an article about Guyana indicating whether it was for sale, following a bombshell interview with Vice President Bharath Jagdeo.
Do investors have to pay bribes to operate in Guyana?
Rampersad replied, “Look at Ramps. We have been operating in Guyana for nine years. And I could tell you that we never paid a bribe. We have never, ever, ever paid a bribe. So, can companies operate in Guyana without paying bribes? Damn, yes. You can.
“Was it easy? No, this is not the case. Because there are people who continually come and say, ‘Look, if you work with me or use me, you wouldn’t have any problems here in Guyana’. And there are companies that succumb to this.
“And I think the Ramps story is a good story for all investors. Instead of trying to figure out who has a relationship with whom, be as open and transparent as possible and be honest with your staff, with politicians and with all your stakeholders.