The largest logistics company in the local oil and gas sector, RAMPS Logistics, has been denied a local content license to operate in Guyana by the Local Content Secretariat.
The Secretariat falls under the Ministry of Natural Resources.
News Source understands that the company received information about being denied the license just over a week ago and has been making efforts to understand the reason behind the decision.
In a statement today, the company said “the recently passed Local Content Act stipulates that a company must have a local content certificate to operate in the Guyana Energy Sector. Ramps Logistics Guyana Inc. has followed all the required guidelines to apply for this Certificate and was denied”.
Sources at the company have told News Source that no clear reason has been given for the denial and the decision by the Local Content Secretariat threatens several major multi-million dollar contracts that the company already has with ExxonMobil and other oil companies operating in Guyana.
Contacted today for a comment, the Head of the Local Content Secretariat, Martin Pertab directed all questions and queries to the Office of the Minister of Natural Resources.
News Source was able to reach out to the Minister of Natural Resources, Vickram Bharrat. The Minister said while he is unaware of the decision to deny the license to the RAMPS logistics company, there are several reasons that could trigger such a move.
“I know they applied but I will have to get the information from the Secretariat. But if you do not meet the criteria, any company as a matter of fact, and not RAMPS alone, but any company if they don’t reach the criteria as stated in the legislation then we can’t approve. It’s not only 51% Guyanese ownership, but also 75% managerial staff, 90% total staff, and so there are other criteria than just the 51% ownership and then we have to be able to verify the 51% ownership too and it’s not just providing a document that an individual has 51% ownership who is a Guyanese citizen. Obviously, there has to be evidence to show that the person is actually investing in the business and it’s not economic rent”, Minister Bharrat said.
Guyana passed local content legislation earlier this year, requiring companies operating in the oil and gas sector to meet a number of criteria to be deemed eligible for a local content license. The legislation seeks to give Guyanese-owned companies operating in the oil and gas sector an advantage in doing business.
There were some concerns expressed by foreign stakeholders about the legislation and since its passage, a number of foreign companies operating in Guyana have been forced to merge their operations with local companies and get more locals involved in their business.
Minister Bharrat explained to News Source that in the event of a company being denied a local content license, the legislation provides room for appeal.
“The secretariat has been very careful in reviewing applications. However, there is a clause in the legislation to say that if you are denied by the Secretariat, then you appeal to the Minister for review. So, if that is true then they have to follow the due course”, he said.
The RAMPS logistics company has called a media conference for Thursday to address the denial of the license.
The company currently employs over 500 persons through its partnerships and has been working closely with other companies involved in oil and gas logistics.