Most oil, gas and petrochemical companies operating in T&T have a stated strategic objective of maximising local content in their operations. In the upstream sector, many companies have legal obligations to report on local content to the Ministry of Energy and Energy Affairs, especially those holding newer production sharing contracts. However, companies face a difficulty in monitoring and evaluating the level and impact of local content. One of the problems involved in monitoring and evaluation is the lack of a firm definition of what is a local company and what methodology should be utilised to determine if a particular supplier is "local" or not. Over the past few years, the Energy Chamber has had numerous discussions on this issue with many stakeholders in the industry, in particular, the Ministry of Energy and Energy Affairs. Despite all the talk, there has been not consensus or any specific definition of what exactly constitutes a local company.
The Energy Chamber has, therefore, taken a decision to put together and advertise a database including a methodology for measuring if a company is local or not. This is a free service and all contractors and service companies can access the database through the Energy Chamber's Web site at www.energy.tt.
The local content score in the database is based around seven weighted questions covering some of the major factors we believe are important to make this determination. The questions centre on local share of ownership, staffing and in-country profit distribution. The chamber's plan is to send a preliminary list of the "local content score" of all companies who submit information by the end of July 2011. The chamber has an energy services committee comprised of members of the chamber, with its main goal being to guide and promote the development of the energy services sector in T&T and in international markets.
Major activities of the committee
To ensure that local content policies are implemented in all sectors of the energy industry (upstream, midstream and downstream). The policies are to be drawn from the document prepared by the chamber entitled, Playing to our Strengths and the local content policy document prepared by both the National Energy Corporation and the chamber.
• Monitor future projects and share information about potential opportunities for local companies.
• Develop a methodology for measuring what is a local company.
• Ensure that at least 150 companies fill out the local content questionnaire.
• Strengthen and update existing database of local companies and their scores.
• Identify export opportunities for local companies in regional/extra-regional markets.
• Monitor initiatives of the Energy Chamber that relate to the energy services sector. These initiatives include STOW, EICDI and the Energy Chamber Learning Centre.
• Encourage co-operation between local companies and facilitate investment into new equipment, training, etc.
• Lobby the Government for changes to the Customs and Excise legislation and practices that hamper the movement of equipment in and out of T&T.
• Educate member companies and the general public about the energy services sector, including the local capacity and the potential for development.
The local content score of this database will be automatically synchronised with the Energy Exchange database, developed by the Energy Guide team. This database is being increasingly used by major customers to pre-qualify contractors and vendors. It contains much greater details than the Chamber's free database and is the recommended methodology for companies who wish to streamline their prequalification processes.
Energy exchange
A contractor's information will be available real time on a subscription basis and the Web-based tool will provide an interactive platform to help not only operators choose contractors but to also aid suppliers to submit information with minimal administrative resources required. The Energy Exchange stores a contractor's legal and taxation documents, highlights their technical competence, HSE compliance, local content score, financial capacity and other general information. A survey was undertaken by the chamber where seven operator and six contractor companies detailed the time and costs associated with prequalification.
The survey showed that on average operators complete 60 of 90 planned supplier pre-qualifications a year, taking about 25 hours of manager, supervisor and clerical time to complete at a cost of US$1100 each or US$66,000 per annum. The survey highlighted that contractors complete 50 of 80 planned supplier pre-qualifications per annum, taking about 27 hours of manager, supervisor and clerical time to complete at a cost of US$1000 each or US $50,000 a year. The Energy Exchange will reduce these costs. As always, the Energy Chamber has sought ways to find business solutions for our membership. With both the Energy Exchange and the local content database, we feel these services not only aid businesses but provide tangible statistical information to help guide policy recommendations.
ENERGY CHAMBER
www.energy..tt