Introduction
Today’s column, and the next, continues to evaluate the feasibility of a Guyana state-owned oil refinery, promoted by many as the leading edge of a local content requirements (LCRs) regime aimed at maximizing downstream domestic value-added in the coming petroleum sector. I shall argue that my earlier economic assessment of LCRs (like refinery economics) does not lend economic justification for such a venture. For the purposes of today’s column, LCRs constitute the legislative and regulatory framework covering the petroleum sector’s value chain.
LCRs have evolved dramatically during the 2000s. While originally these were naïvely viewed as state measures to enable local producers to garner significant proportions of the petroleum sector’s inputs, today they are considered more analytically, as state policies promoting the localization of production, value added, and development potential of the petroleum sector inside the national economy. The earlier naïve view, however, persists and represents LCRs as the protected