Local content: ExxonMobil exploring ways to bring more contracted work to Guyana’s shores

In addition to the billions of dollars currently being pumped into local content, ExxonMobil Guyana has said it is exploring ways to bring further business opportunities to Guyana’s shores, including bringing the work presently being done by foreign companies overseas.
During a press briefing at the company’s headquarters on Wednesday, Esso Exploration & Production Guyana Limited (EEPGL) President Alistair Routledge said, “The Local Content Secretariat, that’s a key part of the Ministry of Natural Resources with whom we work on a regular basis, almost daily, as we ensure there’s clarity on what opportunities we have coming up (in terms of) contracts and transparency. It’s very important that it’s clear to the Government where we’re spending money, how we’re spending money, how we contract all of those opportunities; and have discussions about (for instance) what of the work we do that we contract to other companies. Maybe (work slated to be done) outside of the country could ultimately be brought into Guyana. That is where we’ve identified certain strategic investments, like the Vreed-en-Hoop Shore Base,” he explained.
The oil executive described local content as being close to his heart, claiming that even without the Local Content Act of 2021, the company would still have championed the cause.
According to Routledge, the company is also committed to making sure the public is aware of the local content business opportunities available, and he acknowledged that the Local Content Act has served to create a structured framework for the company to engage with Guyanese businesses on opportunities available.
“Local content is a subject that is dear to my heart, and I think it’s essential that we do that as part of the development of the nation’s resources. We recognize that this is Guyana’s resource, (and) we want people to not only benefit in what we pay in royalties and profit share or taxes, but also in the development phase, (where) we are making opportunities available as quickly as we can for people to be employed and for businesses to benefit,” he explained.
“We’ve seen that partnership with the Government (can) be very successful. I think (that), with or without the Act, we were already committed to doing that. We created the Centre for Local Business Development,” he disclosed.
It has been reported that ExxonMobil spent over US$280 million on local suppliers in the first half of 2023. The data in its 2023 Annual Report states that US$641 million has been spent on local suppliers for the entirety of that year.
In December 2021, the National Assembly passed the Local Content Act, in which is outlined 40 different service areas that oil and gas companies and their subcontractors must procure from Guyanese and Guyanese-owned companies. These include 90 per cent of office space rental and accommodation services; 90 per cent of janitorial, laundry and catering services; 95 per cent of pest control services; 100 per cent of local insurance services; 75 per cent of local supply of food; and 90 per cent of local accounting services.
The Local Content Act mandates penalties such as fines ranging from $5 million to $50 million for oil and gas companies and their sub-contractors who fail to meet the minimum targets of the legislation, as well as those who are in breach of the Act.
Government has meanwhile made clear its determination to push beyond the 40 carved-out areas in the Local Content Act to provide more opportunities for locals, something the Private Sector Commission (PSC) would be working closely on with the administration.