Afrexim bank funding to be provided for local content suppliers – Pres Ali

A fund aimed at helping local content suppliers in Guyana’s oil and gas industry is expected to be set up with the backing of the African Exim Bank, following a model already established in other parts of the world.
During day one of the AfriCaribbean Trade and Investment Forum at the Marriott Hotel, which came to an end on Tuesday, it was announced that a Local Content Facilitation Fund will be set up in Guyana.

President Dr Irfaan Ali, who was the keynote speaker at the event, even said that agreements for this fund, with the backing of the African EXIM Bank, will be in place by the close of proceedings.
“We’ve talked a lot about the payment gap for the suppliers of services to the main oil companies. The timeframe that it takes. And that causes a lot of hardship for the cash flow for local suppliers. Like they did in Angola ad Nigeria, they established what is known as a Local Content Facilitation Fund, that helps local companies in the cash flow.”
According to the President, Guyana and the Region, is placing its faith in the Afreximbank and the services it has to offer. In 2022, some US$1.5 billion was made available to Caricom Member States by the African EXIM bank, as part of efforts to foster closer ties between the two Regions. This figure is expected to increase to US$3 billion, once the remaining Caricom Member States ratify a partnership agreement with the bank.
“We are making meaningful progress. Very strategic alliance. Very strong alliance. And showing confidence in the Afreximbank and what you have to offer this Region,” the President further told the attendees.
Most of Guyana’s local content demand for goods and services is generated from activities in the Stabroek Block, where US oil giant Exxon Mobil and its partners are the operators. ExxonMobil had announced that over US$280 million was spent on local suppliers in the first half of this year.
According to information supplied by Exxon, more than US$280 million was spent on Guyanese suppliers in the first half of the year, marking a 45 per cent increase in purchases from local suppliers compared to the same period last year. And it also adds to the more than US$1.2 billion spent with Guyanese suppliers since 2015.
Esso Exploration and Production Guyana Limited (EEPGL), Exxon’s local subsidiary, is operator of the Stabroek Block, and holds 45 per cent interest, while 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.
In May 2023, EEPGL had revealed that it and its reporting contractors had 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 also 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 number of Guyanese working offshore continued to grow. Among the 2700 personnel committed to supporting ExxonMobil Guyana’s operations, over 1300 are Guyanese, constituting approximately 48 per cent of the offshore workforce.
Last year, the Natural Resources Ministry, through the Local Content Secretariat, modified the five-year local content plan of major oil operators to ensure that contractors and sub-contractors issue payments to Guyanese suppliers within 30 to 45 days following the receipt of a correct invoice.
This was after numerous complaints were made on prolonged delays, as much as 90 days, in the payments for goods supplied or services rendered to major players in the oil and gas industry – an issue that had been engaging the Government’s attention. (G3)