Under increasing scrutiny over concerns that it continues to benefit from a hugely lopsided 2016 Production Sharing Agreement (PSA), ExxonMobil on Thursday warned that “unrealistic” local content targets can have deleterious impacts.
Government’s plan for local content legislation has been seen as one way of rebalancing the scales.
In a statement, ExxonMobil disclosed that at the end of 2020, the total Guyanese workforce supporting ExxonMobil Guyana’s overall activities was more than 2,300. Since 2015, more than GY$77.6 billion has been spent with more than 800 Guyanese companies for goods and services ranging from food to engineering.
Critics of the PSA say that Exxon and its tier one contractors have to urgently train more Guyanese to take up specialised positions within the oil and gas industry.
In its statement on Thursday, ExxonMobil Guyana said it has made its submission to the government on the draft local content policy, restating its commitment to effective initiatives to help build a globally competitive workforce and supply base.
A written submission was made after engagement with officials from the Ministry of Natural Resources recently.
“We are committed to growing local content that will generate broad and sustainable economic development while supporting safe development of the nation’s oil and gas resources,” said ExxonMobil Guyana President Alistair Routledge in the release.
“We are pleased that the government continues to seek broad input and collaboration to develop an approach suited to Guyana’s unique situation and national development objectives.
“Local content policy or legislation should be informed and supported by appropriate economic, labour and industrial baseline studies…It is essential that when driving local content in one sector, actual and projected national capacity is taken into consideration to avoid negatively impacting other sectors of the economy”, Routledge said.
“Prior experience around the globe demonstrates that overly aggressive local content regulations and mandates can have unintended, negative consequences on the development of projects, industry, and the broader economy,” he warned.
ExxonMobil Guyana Local Content Advisor Devon Seeram said that the company works closely with its prime contractors to ensure that they are equally committed to developing local content and that their local content plans are effectively implemented.
“Since our first discovery in 2015, we have made significant progress creating jobs, growing the number of local suppliers we work with and increasing our local spending,” Seeram said. Guyanese businesses and ExxonMobil have built local content together, and we believe that additional progress is both possible and necessary as the oil and gas sector continues to grow.”
