ExxonMobil wants a flexible Local Content Policy / Laws
… He says that unrealistic demands can jeopardize operations – Local Content Advisor
ExxonMobil wants a flexible Local Content Policy / Laws
Kaieteur News – ExxonMobil Guyana warns the Guyanese public to temper expectations of potential benefits that can be gained from exploiting the oil and gas industry, as these could have negative implications.
This position was reaffirmed following the company’s latest submission to government on the draft local content policy, “reaffirms its commitment to implementing effective initiatives to help build a globally competitive workforce and supply base.”
The company confirmed in a public missile on Wednesday that it had made a written submission to the government following recent engagement with officials from the Ministry of Natural Resources.
This is in addition to the quarterly reports produced and submitted to the Ministry.ExxonMobil Guyana, in making the announcement, underlined the company’s commitment “to grow local content that will generate broad and sustainable economic development, while simultaneously supporting the safe development of the nation’s oil and gas resources. ”
He said, ExxonMobil is “pleased that the government is continuing to seek broad input and co-operation to develop an approach suited to Guyana’s unique situation and national development objectives.”
He warned however that “Local content policy or legislation should be informed and supported by appropriate economic, labor and industrial fundamental studies.”
According to Routledge, “It is essential, when driving local content into one sector, that real and projected national capacity is taken into account to avoid having a negative impact on other sectors of the economy.”
He said “previous worldwide experience shows that overly aggressive local content regulations and mandates can have unintended negative consequences on project development, industry, and the wider economy.”
Earlier in the day, the company hosted a Local Content Background for journalists, where Traecy Roberts, a Local Socio-Economic Content Adviser, spoke about the need for flexibility in any published Local Content Policy and Laws.
Local Socio-Economic Content Adviser, Traecy Roberts
She was adamant that changing the laws and contract terms intermittently could undermine industry investments and operations in general.
Roberts further argued that with the oil and gas industry being a technical operation, the company would not want to jeopardize its operations by setting unrealistic standards.
He cited as an example, the fact that Guyana does not even produce steel.
According to ExxonMobil Guyana’s Local Content Advisor, Devon Seeram, the company works closely with its main contractors to ensure that they are equally committed to developing local content and tracks that their local content plans are implemented ‘ effective.
He also highlighted the need for a better understanding of the needs of the industry and noted that, for example, although the company spent some US $ 3M in 2020 on transportation, only about US $ 1.8M was actually retained in the country, since the rest went towards imports which means that the money actually spent in the country was not spent.
He used accommodation as another example and noted last year that while some US $ 17.6M is spent on accommodation, 80 per cent of this expenditure was not actually retained in the country, as that had gone into imports of goods and services. materials.
This scenario was repeated, across other sectors more prominently in the form of insurance, where only one percent of that was spent in the country because local insurers lacked the capacity.
It sought to highlight that since “our first discovery in 2015, we have made significant progress creating jobs, increasing the number of local suppliers we work with and increasing our local spend.”
It revealed that at the end of 2020, the total Guyanese workforce supporting the general activities of ExxonMobil Guyana was 2,338 people and accounted for about 56 percent of the local workforce.
According to Seeram, since 2015, more than GY $ 77.6B or some US $ 338M has been spent directly with more than 800 Guyanese companies for goods and services ranging from food to engineering.
Roberts also used the occasion to warn that because ExxonMobil is the operator in three different blocks that are at different stages of operations, workforce requirements can vary and cite them as exemplars where more technical expertise would have to be used. is available in the country.
Company officials also noted that in developing its local content policy, it was aware of the fact that experts could be drawn from other critical sectors in the country.
The consultants also used the occasion to talk about the need for domestic companies to reinvest in their operations to build capacity.
According to Seeram, the company is cooperating with its suppliers to ensure that Guyanese receive preferential treatment “once they have the capability and competitiveness.”