ExxonMobil pumped over $80B into Guyana’s economy in 2022
…Guyanese comprise over 65% of O&G workforce
…Local Content Annual Plans approved
The Natural Resources Ministry, through the Local Content Secretariat, has approved the 2023 Local Content Annual Plans for operator ExxonMobil as well as four major subcontractors: Halliburton, Baker Hughes, Technip, and Saipem.
The Local Content Act obligates contractors, subcontractors or licensees to submit Local Content Annual Plans for approval, in keeping with the legal obligation on companies and persons engaged in petroleum operations or related activities in the petroleum sector to prioritise Guyanese nationals and Guyanese companies in the procurement of goods and services for the enhancement of the value chain of the sector.
Speaking with this publication, Director of the Secretariat Martin Pertab said that the review and approval process will continue over the next week with the remaining eligible companies.
“The review process was thorough, with multiple iterations, to ensure maximum participation of Guyanese suppliers in the supply of goods and services to the oil and gas industry,” Pertab explained.
“The approval means that companies will commit to paying local suppliers within 30-45 days. This year our focus will be on, among others, monitoring and evaluating the implementation of the respective approved local content plans.”
Pertab noted too that the approval of these plans signifies that companies have agreed to help with the building of local capacities through training, scholarship and other forms of direct interventions.
As per the Local Content Act, these annual local content plans are required to outline, among other things, programmes for ensuring that first consideration is accorded to Guyanese nationals for employment; programmes for ensuring equal treatment of Guyanese; and programmes for enhancing the skills of Guyanese nationals.
Companies must also detail its criteria for the supply of goods and the provision of services as well as its supply chain management strategy and procurement strategy.
ExxonMobil Guyana, in a statement on this development, revealed that its 2023 plan describes how the company intends to execute projects and implement systems to promote the development of local content this year.
“ExxonMobil Guyana’s evolving strategic plan for operational growth includes balancing meeting the needs of the business while developing Guyanese content in a phased approach. It is assessed annually to ensure objectives are met in a sustainable and systematic manner,” the statement reads.
Meanwhile, ExxonMobil Guyana and the subcontractors also received certificates of compliance for the year 2022.
In addition to this year’s Local Content Annual Plan, ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), as well as some subcontractors have had their Five-Year Master Plans approved by the Ministry of Natural Resources in October 2022.
Pertab highlighted that a key distinction between the Local Content Annual Plan and the Five-Year Master Plan is that companies are required by law to implement the former.
The Ministry of Natural Resources had explained that the Five-Year Master Plan is intended to provide the Minister and the Local Content Secretariat with an insight into the contractor, sub-contractor or licensee’s projected activities with regard to employment, procurement and capacity development of Guyanese suppliers.
ExxonMobil Guyana is on record saying that it takes a multi-tiered approach to building local talent and capabilities in the country.
“ExxonMobil Guyana is committed to working collaboratively with stakeholders to develop opportunities for nationals and local businesses in a structured and sustainable way, consistent with the terms and conditions of the Petroleum Agreements, the Local Content Act, and related guidelines,” the company emphasised in an article dated December 2022, on its official website.
In addition to aggressive recruitment drives to ensure Guyanese nationals are hired for positions within the workforce, ExxonMobil Guyana says it also aims to utilise Guyanese suppliers for goods and services.
More than $180B
Meanwhile, ExxonMobil Guyana has revealed that itself and its reporting contractors have spent more than $80 billion (US$400 million) with more than 1500 Guyanese businesses in 2022 alone.
That is part of the more than $180 billion (US$900 million) spent with locals since the first discovery in 2015.
By the end of 2022, the company and contractors had employed over 5000 Guyanese workers, representing more than 65 per cent of the overall workforce in the local oil and gas industry.
The company noted too that the numbers of Guyanese working offshore continued to grow. Among the 2700 personnel committed to supporting ExxonMobil Guyana’s operations, over 1300 were Guyanese, constituting approximately 48 per cent of the offshore workforce.
ExxonMobil Guyana assured that these numbers will continue to increase as more projects come onstream, providing opportunities for businesses and individuals alike,
“We believe that the true measure of our success lies not only in the barrels produced but also in the positive impact we create for our people and the communities in which we operate. By prioritising local talent, partnerships, and investments, we aim to cultivate a thriving and sustainable environment that benefits everyone,” said President of ExxonMobil Guyana Alistair Routledge.
Guyana, with ExxonMobil as the operator, began producing oil on December 20, 2019, in the Stabroek Block. Guyana’s oil revenues are being held in the Natural Resource Fund (NRF) at the New York Federal Reserve Bank, where it is earning interest.
The oil rich Stabroek Block is 6.6 million acres (26,800 square kilometres). ExxonMobil, through its local subsidiary holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
ExxonMobil has said it anticipates at least six projects offshore Guyana will be online by 2027. Production has already started in the second phase, with the Liza Unity FPSO vessel in operation.
The third project –the Payara Development – will target an estimated resource base of about 600 million oil-equivalent barrels, and was at one point considered to be the largest single planned investment in the history of Guyana.
Meanwhile, the Yellowtail development, which will be oil giant ExxonMobil’s fourth development in Guyana’s waters, will target a mammoth 250,000 bpd. ExxonMobil has also only recently received approval for Uaru, its fifth project in Guyana’s waters.
The joint venturers plan to submit its Field Development Plan (FDP) for its sixth project, Whiptail, for governmental approvals later this year. (G11)