Discovery Alone Does Not Create Development | Caribbean Energy Week in Paramaribo

Credited: lIeana Ferber, CEO & Founder of at Colibrí Business Development LLC,

The discovery of oil changes expectations overnight. It raises hopes of economic transformation, stronger institutions, new business opportunities, and improved livelihoods. But discovery, by itself, creates none of these outcomes. Development does.

That distinction is particularly important for the Caribbean’s emerging oil economies. As new producers seek to convert petroleum resources into national benefit, the central policy challenge is no longer whether oil can generate wealth, but whether governments can shape the right conditions for that wealth to create lasting local value.

This was the focus of a recent panel discussion at Caribbean Energy Week in Paramaribo, “From Discovery to Development: Maximizing Local Value Creation in the Caribbean’s Emerging Oil Economy.” I was pleased to join Anthony Paul, Board Chairman of the Lloyd Institute of the Caribbean, Gail Meyer, Director of the Local Content Alliance, Joel Lutchman, Auditor at Moore Suriname, and Shaun Rampersad, Chief Executive Officer of Ramps Logistics. The session was moderated by Dr. Norwell Hinds, Director of the University of Guyana Institute for Energy Diplomacy.

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The discussion reinforced a point that is too often overlooked in public debate. Local content is not an end in itself. Nor is it simply a matter of imposing targets, increasing percentages, or requiring certification. The real objective should be local value creation, meaning the deliberate and sustained development of national capabilities, local enterprises, skilled workers, and institutions that can participate meaningfully in the oil and gas value chain over time.

For governments entering the petroleum sector, that requires more than ambition. It requires discipline, realism, and a deep understanding of how economic development actually happens.

One of the most common policy mistakes governments make in new oil economies is that they move too quickly to prescribe solutions before properly diagnosing the problem. Local content policy should respond to a clearly identified economic development challenge. That means understanding root causes, not simply reacting to political pressure or public expectations.

If local firms are not winning contracts, the answer may not be the absence of mandatory local content provisions. The real constraint may be weak supplier capability, lack of financing, insufficient technical standards, limited information about procurement opportunities, or poor coordination across institutions. Unless these root causes are understood, policy will remain solution-driven rather than problem-driven, and that is rarely a formula for success.

A second recurring mistake is failing to listen carefully to the full range of stakeholders in the sector. Governments, operators, contractors, local suppliers, training institutions, and regulators all have distinct roles and responsibilities. When policy is developed without genuine consultation or without a clear understanding of how these actors interact, implementation problems are almost guaranteed. Effective local content frameworks depend on trust, clarity, and institutional coordination.

A third weakness is the tendency to design policy without an accurate baseline of domestic capability. Governments need to know, in practical terms, what local suppliers can currently deliver, what skills the national workforce already has, and where the most important gaps exist. Without that baseline, targets and requirements may look strong on paper while remaining detached from market reality.

This becomes even more problematic when governments do not adequately understand industry demand across the project lifecycle. The requirements of operators and service companies differ materially across exploration, development, production, and decommissioning. A local content strategy that does not reflect those differences will struggle to identify the right interventions at the right time. Opportunity mapping by project phase is not optional; it is essential.

There is also a critical distinction between policy design and policy implementation, which many governments underestimate. Drafting a policy is one task. Implementing it is another. Effective implementation requires administrative systems, monitoring capacity, regulatory judgment, technical knowledge, and institutional continuity. Without these, even well-intentioned frameworks risk becoming aspirational documents with limited impact on the ground.

Another issue that deserves more attention is the tendency to frame the debate as a choice between attracting investment and shaping local value creation. This is the wrong framing. Governments should not think in terms of a shift from one agenda to the other, as though they must first secure investment and only later begin to think seriously about local participation. These priorities must move together.

Local value creation should be part of the agenda from the beginning and remain there throughout the life of the sector. This does not mean imposing heavy obligations too early or disregarding investor concerns. It means embedding practical, continuous, and sustainable initiatives from the outset, including capability mapping, supplier development, workforce preparation, institutional strengthening, and structured engagement with industry.

The real challenge is not whether to intervene early or late, but how to intervene appropriately. Countries must avoid acting too early with measures that exceed local capacity and undermine confidence. They must also avoid acting too late, after key supply chain opportunities have already been captured and the window for building national capability has narrowed. This is why a phased and fit-for-purpose approach is so important. The timing, design, and intensity of local content measures must reflect actual market readiness, institutional maturity, and supply chain realities.

In this context, one of the most important and often underappreciated opportunities for local firms lies not at the top of the value chain, but within it. Too much policy and public attention is focused on direct prime contracts, when in reality, many domestic firms are more likely to enter the sector as Tier 2 or Tier 3 suppliers. That is not a weakness. In many cases, it is the smartest and most commercially viable entry point available.

Subcontracting gives local firms a chance to build experience, improve systems, meet industry standards, and develop a performance record. It also creates space for small and medium-sized enterprises to grow alongside larger players. Over time, this can produce a much more resilient form of local participation than a narrow emphasis on headline contract awards. The experience of Ramps Logistics in Guyana is a clear and practical example of how local companies can grow through this pathway and deepen their role in the sector over time.

This is why local value creation must be understood as a long-term development process, not as a short-term compliance exercise. Strong outcomes depend not only on regulation, but on institutions that function, firms that can perform, workers who are trained, and policy frameworks that evolve with the market rather than attempting to outrun it.

For the Caribbean’s emerging producers, the stakes are high. Petroleum development can support industrial growth, enterprise development, and skills formation, but only if governments resist the temptation to confuse ambition with strategy. Resource wealth does not automatically create national capability. It must be built deliberately, patiently, and with a clear understanding of local constraints and opportunities.

The countries that succeed will not necessarily be those with the most aggressive local content rhetoric. They will be the ones who listen more carefully, diagnose problems more accurately, sequence reforms more intelligently, and build institutions capable of implementation. They will understand that local value creation is not about extracting symbolic commitments from investors, but about creating the conditions under which domestic participation becomes credible, competitive, and sustainable.

Discovery may create momentum. It may create excitement. It may even create a sense of urgency. But only thoughtful policy creates development, and only development creates lasting value.

Photos: Energy Capital & Power

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